Proclaiming that the digital decade is just dawning, Microsoft chairman and chief software architect Bill Gates yesterday gave the first official peek at Longhorn, the next version of Windows expected out in 2006.

Longhorn will be "the biggest release of this decade, the biggest since Windows 95", Gates said in his opening keynote at Microsoft's Professional Developers Conference (PDC) in Los Angeles.

With Longhorn, Microsoft will introduce a unified storage system dubbed WinFS for Windows Future Storage. The unified file system is the Holy Grail for Gates. "I have been talking about it for over a decade and finally here it is," he said

Together with a new engine underlying the Longhorn user interface codenamed Avalon, WinFS should make it easier for users to find and organise files on their PCs. The familiar directories and folders will be replaced with XML (extensible markup language) metadata, allowing users to easily find documents that relate to a specific project or topic, or all communications with one person, for example.

Also, Longhorn will pull data out of the 'silos' that are the individual applications, Gates said. Data will reside at the platform level, instead of at the application level. Email address book information, for example, will be accessible from multiple applications, instead of just the email client, Gates said.

WinFS will be based on technology from Yukon, the codename for the next version of Microsoft's SQL Server database due out next year. "Until we had a lot of this database technology we could not organise these things," Gates said.

Hillel Cooperman, product unit manager for the Windows user experience, demonstrated an early version of Longhorn. The user interface at first glance looked much like current Windows versions, though with transparent Windows and a transparent sidebar that includes a clock, instant messenger contacts list and other information.

Cooperman also demonstrated new features of the file system. The "My Documents" icon on the desktop no longer opens a specific folder on the hard disk drive, but displays documents located anywhere on the system tagged with XML data. He displayed documents by project and sender.

Other enhancements in Longhorn will include the hardware-based security technology called NGSCB (next-generation secure computing base) and Indigo, the codename for a web services technology. Indigo will connect applications on a system as well across networks, Gates said.

Software is what held back the digital decade in the past 10 years, according to Gates. "The expectations of the last decade required more time," he said. "It is simple to say where the constraint is in this era? It is software," not hardware. And Longhorn, of course, will deal with those constraints.

Microsoft has said a Longhorn first beta is planned for next year. The company has not given an official product release date.

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