Throughout December 2008, rumors persisted that Microsoft had already completed development of the Windows 7 build that would later be released to the public. That build, artificially bumped up to an even number 7000, was in fact finalized by mid-December and entered into a so-called escrow phase. Over the next few weeks, the software giant tested build 7000 extensively to ensure that it met the lofty quality bars required for a public release, iterating the code (but not the build number) here and there in order to squash bugs. By the end of the month, build 7000 had leaked, and I published a massive review and several screenshot galleries of what would become the public Beta.

Curiously, Microsoft never issued the public Beta ahead of time to its technical beta testers--left to stew and wonder what the point of the program was--or to the PDC reviewers who had been promised multiple interim builds of the product (builds that were never issued, incidentally). These oversights speak volumes about a not-so-subtle change in the development philosophy of Windows under Steven Sinofsky: First, changes to the OS not communicated to the public until they are deemed to be of release quality internally. And second, beta testers no get the chance to influence the design of Windows. As is the case at Apple, all design work is handled internally in secret instead. Beta testers can simply provide bug reports feedback that will largely be ignored. Again and again, I've been contacted by people on the Windows 7 technical beta with examples of bug reports that have been closed by Microsoft because the features work exactly as they intend.

On the flipside, the quality of the Windows 7 Beta is stunningly good, and one of the more positive ramifications of the new development philosophy is that Microsoft has, in effect, completely recast the meaning of preexisting development milestones. On previous Windows betas, for example, the company would issue two or more beta milestones, like Beta 1 and Beta 2, and the quality of the earlier beta releases, especially, was often lackluster. Under Sinofsky, these concepts are all upended. With Windows 7, there will only be a single Beta release, and unlike with previous Windows versions, this release will be both "feature-complete" (or, as Microsoft calls it, "API complete") and of very high quality.

Not to get off track, but it's worth mentioning here that the Beta milestone will be followed by a single release candidate (RC) build; in the past, Microsoft would typically ship one to three release candidates, followed by a number of interim builds, each improving subtly. This Windows 7 RC, due in April 2009 alongside Windows Vista Service Pack 2 (SP2), will be of essentially final release quality and is being released only to ensure that there are no remaining "show stoppers." The RC will be followed by Windows 7's release to manufacturing (RTM, around mid-year) and the final release, or "general availability" (GA) of the product. I expect Windows 7 to ship to the public sometime in summer 2009.

Enter the Beta

Microsoft announced the Windows 7 public Beta during CEO Steve Ballmer's CES 2009 keynote address in Las Vegas on January 7, 2009. Windows 7 will "the best version of Windows ever," according to Ballmer (of course), and a combination of "simplicity, reliability and speed." Ballmer announced that the feature-complete Windows 7 Beta was then immediately available to MSDN and TechNet subscribers. And starting just days later, he said, the first 3 million people who signed up for the public beta at Microsoft.com would be able to download the Beta version for free.

Ballmer spent a lot of time talking up Windows 7 during his keynote, though no new features were actually revealed during the event. "Windows 7 should boot more quickly, have longer battery life, and fewer alerts," Ballmer said. "Windows 7 makes entertainment better with a new Media Center experience, and the ability to easily access your media across PCs and play it on other devices. And Windows 7 enables cool new user interface things like touch."

The public reacted to the Beta version of Windows 7 with a frenzy that surprised everyone, including Microsoft. On Friday, January 9, 2009, as promised, Microsoft opened up the floodgates on its public download servers. But within hours, the servers ground to a halt as the demand overwhelmed capacity. Microsoft was forced to temporarily halt the downloads and retrench: It added capacity and restarted the downloads less than 24 hours later.

"Thank you for your enthusiasm, interest and willingness to beta test," a posting on the Windows team blog read at the time. "It has been great to see the positive early reviews and feedback. As you know, this is a beta product. We are working hard to get Windows 7 ready and right. Your input is a critical part of that process. Thank you!"

And as part of that 'thank you,' Microsoft removed the download number limit: Instead of capping downloads at 3 million, Microsoft instead kept the download servers open for two full weeks, allowing several million people to download and install its next operating system. For a world attuned to hearing nothing positive about Windows lately, the news must have been a shocker: People were simply going nuts over Windows 7.

And the reviews couldn't have been more positive. High and low, far and wide, virtually nothing but overwhelmingly good news was reported about Windows 7. Tech industry heavyweights and neophytes alike reported success after success with Windows 7. Even Apple toadies like Walt Mossberg and David Pogue couldn't contain the good news: Microsoft, clearly, has a hit on its hands.

Moving past Beta

By early February, Microsoft was again confirming what I've been reporting all along: It would issue just the one Beta release and follow that up with a single Release Candidate build. "The next milestone for the development of Windows 7 is the Release Candidate or 'RC,'" Microsoft senior vice president Steven Sinofsky confirmed in a blog post on February 1, 2009. "We've released the feature complete Beta and have made it available broadly around the world. The path to Release Candidate is all about getting the product to a known and shippable state both from an internal and external standpoint."

Sinofsky noted that the RC version of Windows 7 will be "Windows 7 as Microsoft intends to ship it" and will place the OS on a fast track towards RTM (release to manufacturing), when the code is literally completed, and general availability (GA), when it is made available to the public. No timeline for the RC, RTM, or GA were provided. "The answer [to the schedule questions] is forthcoming," Sinofsky added.

"We are taking a quality-based approach to completing the product and won't be driven by imposed deadlines," Sinofsky claimed. "We're promising to deliver the best release of Windows we possibly can and that's our goal. Together, and with a little bit more patience, we'll achieve that goal."

On February 2, 2009, Microsoft issued its strongest-worded message yet about the upcoming Windows 7 OS: The system was now far enough along that the software giant's partners needed to get on board with compatible software applications, hardware, and drivers. Clearly, what Microsoft was trying to avoid is the situation that dogged Windows Vista in its early days, where partners were not ready for the release of that system despite several months of warnings from the company.

To mark this milestone, Microsoft issued its Windows 7 and Windows Server 2008 R2 Ecosystem Readiness Program, which aims to help its hardware and software partners to create compatible and innovative solutions that work with Windows 7. (And with Windows Server 2008 R2, which is based on the Windows 7 code base.)

"With Windows 7, we prioritized the things that developers cared about, and share an application programming interface (API)-complete version of Windows 7 at the Professional Developers Conference (PDC)," Microsoft corporate vice president Mike Nash said at the time. "We followed this momentum by delivering a solid and stable beta version at International CES earlier this month. What this means for partners is that they can confidently invest and start testing now because the Windows 7 beta will have the same API set that they will see in the final release."

In other words, developers could begin working with Windows 7, even in beta, because the underlying APIs are not going to change before the final release. This, too, stands in sharp contrast to the experience with Windows Vista, which went through several years of often dramatic changes. The end result was that many developers simply gave up and waited on the final release before committing to testing their solutions on Vista.

Over two years later, of course, the situation had improved dramatically. Windows Vista was now broadly compatible with a wide range of PC-based software applications and hardware devices, and because Windows 7 builds off that Vista base, it will benefit from this work. Still, Microsoft warned that early testing would result in a better experience for customers when Windows 7 is released later in 2009. And it would like its partners to do that work immediately, not later.

"The goal is to ensure that partners' existing hardware and applications are compatible with Windows 7 and Windows Server 2008 R2; to test and address any potential performance issues; and to make sure their devices, applications and services can take full advantage of the new features," Nash added. "The maturity and predictability of Windows 7 is going to drive a new level of innovation, which will be very exciting to see."

SKU-ered by the product lineup

A day later, on February 3, 2009, Microsoft unveiled the product edition, or SKU (stock keeping unit), lineup for Windows 7. (See my overview of the Windows 7 product editions.) The software giant was careful to present its Windows 7 lineup as a simplification of the oft-criticized multi-SKU Windows Vista lineup. But critics note, correctly, that Microsoft is still shipping Windows 7 in several product editions and that this decision could confuse customers.

Both sides have a point. On the simplification front, Microsoft is making one important change to the Windows lineup. Each product edition will be a true superset of one another, making it easier than ever for customers to pick the version that's right for them. "As customers upgrade from one version to the next, they keep all features and functionality from the previous edition," Microsoft general manager Mike Ybarra said. "With Windows 7 there is a more natural progression from one edition to the next."

That wasn't the case with Windows Vista, where the consumer-oriented Home Premium edition included some features that were not available in the corporate-oriented Business edition, and vice versa. Now, as users step up through the product line-up, each version simply builds off the last, and no functionality is lost.

Regarding the actual product editions, Microsoft will offer two editions, Windows 7 Home Premium and Windows 7 Business, to mass markets in developed nations via retail outlets and with new PCs. Microsoft expects these two editions to meet most customers' needs. (A third Windows 7 Enterprise edition will be offered via volume licensing to businesses with Software Assurance subscriptions.)

A few other niche market versions will be sold as well. A limited Windows 7 Starter edition will be offered worldwide, but only with new PCs. Windows 7 Ultimate will be functionally identical to Windows 7 Enterprise but will be offered to consumers who literally want every single Windows 7 feature. And a Windows 7 Home Basic version will be offered to emerging markets. Microsoft also confirmed that it will create a single "N" version of Windows 7 to meet its legal requirements in Europe; as before, however, few customers are expected to ever purchase this version as it does not include Windows Media functionality.

Because each product edition is a superset of the one before it, each builds off of the functionality of the lower-end edition. Listed in order of functionality, the Windows 7 product lineup breaks down like so: Starter, Home Basic, Home Premium, Professional, Enterprise/Ultimate. One of the benefits of this approach is that a product like Windows 7 Professional now includes the full digital media suite of applications that also appears in Windows 7 Home Premium.

Despite the simplification of the lineup, some still felt that Microsoft was artificially bifurcating Windows in order to pump up profits. The company said that wasn't the case. "Within a customer base of over one billion, there are a lot of important customer niches, or segments, and we want to make sure we have an appropriate product for everybody," Ybarra noted. "We understand some of our customers have different needs, like enthusiasts who want every feature in Windows, for example. But for a majority of our customers the choice is really simple: Windows 7 Home Premium or Windows 7 Professional."

Microsoft also ended speculation that it would create a version of Windows 7 designed specifically for low-end netbook computers. Instead, the company will let PC makers choose which versions to put on their machines; Windows 7 is speedy enough to run well on that class of hardware regardless of which version is used, the company says.

Questions remain

The problem with Microsoft's SKU announcement, of course, is that it presents only half the picture. What customers need to know now is how Microsoft will price the various Windows 7 product editions. And this conversation is much more complicated than it seems at first glance.

First, there is retail pricing to consider. Microsoft will sell boxed copies of most Windows 7 product editions in both Upgrade and Full packaging, as always. But while Windows XP users do qualify for Upgrade pricing, they cannot perform in-place upgrades of that OS to Windows 7. And then there is the matter of Windows Vista users. Will they be rewarded in some way for upgrading to Microsoft's presumed-disastrous previous release? And what about Windows Vista Ultimate users specifically? They paid extra for a version of Vista that most certainly hasn't lived up to promises and expectations.

Also, how will Microsoft handle cross-version upgrades? Is there just a single Windows 7 Home Premium Upgrade package or are their multiple versions to handle all downmarket previous products (Windows XP Home, Windows XP Media Center, Windows XP Starter, Windows Vista Home Basic, Windows Vista Home Premium, Windows Vista Starter, and so on)? Will the company only provide Upgrade versions for the closest compatible version (i.e XP Media Center and Vista Home Premium are the only versions that can upgrade directly to Windows 7 Home Premium)?

Also on the upgrade docket are questions around 32-bit and 64-bit versions of the product. Microsoft will not support inplace upgrading of 32-bit versions of Windows to 64-bit versions in any way, but they will almost certainly support upgrade pricing for those customers. Will Microsoft push 64-bit versions of Windows 7 for new PCs? Or will it continue to let PC makers make that decision?

Also, Microsoft can and should (I would argue "must") also address multi-PC households. Will the software giant offer a true multi-PC license for various Windows 7 product editions? Or will it simply continue to be out of touch with the needs of its best customers?

My opinion on this is the Microsoft should price Windows 7 accordingly, given the poor state of the economy and the public reaction to Windows Vista. This means sub-$100 Upgrade versions. This means sub-$200 Full versions. And it means $125-$150 three-PC licenses for home users, similar to what the company now offers with Microsoft Office. Microsoft would be foolhardy to price itself out of the market with Windows 7. It's time to ride the momentum to the bank.

But that remains to be seen of course. By the time of the next installment of this series, I hope to have the answers.