Microsoft's Windows 8 operating system is being released before it is completely ready, Intel CEO Paul Otellini reportedly told employees in Taiwan at a company event, according to a report.

Bloomberg News, citing a person who attended the private meeting, quoted Intel's (NASDAQ: intc) CEO as saying that although improvements are still needed on Windows 8, releasing the software before it is ready is the right move and that Microsoft can improve upon it later.

Windows 8, which is designed for tablets, is slated to be released around the world October 26. Microsoft is vying to get its software into tablets before the holiday season, in a bid to help the software giant compete against Apple's (NASDAQ: aapl) iPad, Amazon's (NASDAQ: amzn) Kindle Fire HD tablet, which run on Google's (NASDAQ: goog) Android platform and Google's Nexus 7 tablet.

The latest entrant into the digital wars between tablet makers, Microsoft (NASDAQ: msft) is expected to roll out a tablet of its own -- the Surface -- in late October.

Microsoft told CNBC that "With over 16 million active preview participants, Windows 8 is the most tested, reviewed and ready operating system in Microsoft's history. We're looking forward to making Windows 8 available to the world on October 26th."

Intel dismisses 'unsubstantiated' comments its CEO allegedly made about Windows 8's readiness


Intel has just released a statement in response to comments about the readiness of Windows 8 allegedly made by the company's CEO Paul Otellini. Yesterday, Otellini reportedly told staff that Windows 8 would be released before it's ready — but Intel says the comments are based on "unsubstantiated news reports." The company seems to have stopped short of denying that Otellini made the comment, but offered plenty of rosy comments for its partner Microsoft.

"Windows 8 is one of the best things that ever happened to Intel."

Intel says it's had "a long and successful heritage working with Microsoft on the release of Windows platforms," and that the companies have been "working closely together on testing and validation to ensure delivery of a high-quality experience." Yesterday, Intel declined to discuss details of its internal employee meetings, but has today offered unrelated comments from Otellini, who says that "Windows 8 is one of the best things that ever happened to Intel."

We are pleased to be releasing a set of improvements to Windows 8 in broad areas of performance, power management and battery efficiency, media playback, and compatibility. These improvements are available starting today via Windows Update. We wanted to briefly talk about our improvements to the engineering system and in particular the speed at which we were able to deliver these updates to you.

With every release of Windows we have had approximately 8-12 weeks from when we released the code to OEMs and manufacturing and when the product was available on new PCs and for retail customers. This time has historically been used to match newly developed PCs, which can include a variety of new or enhanced components, drivers, and companion software, with the final code for Windows. Because these hardware and software components are brand new, it could be the case that they uncover the need for changes and improvements to Windows in the areas of fundamentals.

We would often create dozens of changes for each OEM for these new PCs. Those changes would be deployed during manufacturing of those PCs and thus would be invisible to customers. While those changes could potentially apply to a broader range of PCs, we did not have in place the testing and certification to broadly distribute these updates. As a result, customers would have to wait until the first service pack to see these enhancements. We know many folks would spend time working to uncover these OEM enhancements in a desire to have the most up to date Windows.

During the final months of Windows 8 we challenged ourselves to create the tools and processes to be able to deliver these “post-RTM” updates sooner than a service pack. By developing better test automation and test coverage tools we are happy to say that Windows 8 will be totally up to date for all customers starting at General Availability. If you are an MSDN or enterprise customer, these updates will be available for your Windows 8 PCs via Windows Update as of today (October 9), following our standard cadence for Windows Updates on the second Tuesday of each month at about 10:00am.

As we have always done, any updates will have a knowledge base (KB) article and documentation. Documentation for these updates are documented here, and the text is reproduced below. We will of course continue to issue and publish changes and enhancements from this point forward, just as we have done with Windows 7.

We think this new pace of delivering high quality updates to Windows will be a welcome enhancement for all of our customers.

--Steven

SkyDrive

-Search within SkyDrive
-Rename and move folders and files
-New first-run experience
-Custom sort order

Mail, Calendar, People, and Messaging

-Conversation view of your inbox
-Complete IMAP account support
-Accepting and declining invitations in email
-Capturing and updating your account picture
-Improved search
-Search for a contact within the Messaging app

Maps

-Bird's eye view
-3,000+ indoor venue maps
-Driving directions hints
-Improved navigation and layout
-Improved customization, including custom pushpins and roaming options
-Integration with Bing and Travel apps

TO OUR SHAREHOLDERS, CUSTOMERS, PARTNERS AND EMPLOYEES:

Last year was a big year — we delivered strong results, launched fantastic new products and services, and positioned Microsoft for an incredible future.

For fiscal year 2012, revenue grew to a record $73.7 billion. We also maintained strong cost discipline resulting in cash flow from operations of $31.6 billion, an increase of 17 percent from the prior year. In addition, we returned $10.7 billion to shareholders through stock buybacks and dividends.

We delivered these results while preparing a pipeline of new and updated products that will launch in the year ahead. To best understand what we are about to deliver and what we're building toward, it's important to recognize a fundamental shift underway in our business and the areas of technology that we believe will drive the greatest opportunity in the future.

Our Business: Devices and Services
Last year in this letter I said that over time, the full value of our software will be seen and felt in how people use devices and services at work and in their personal lives. This is a significant shift, both in what we do and how we see ourselves — as a devices and services company. It impacts how we run the company, how we develop new experiences, and how we take products to market for both consumers and businesses. The work we have accomplished in the past year and the roadmap in front of us brings this to life.

Devices With End-User Services
We will continue to work with a vast ecosystem of partners to deliver a broad spectrum of Windows PCs, tablets and phones. We do this because our customers want great choices and we believe there is no way one size suits over 1.3 billion Windows users around the world. There will be times when we build specific devices for specific purposes, as we have chosen to do with Xbox and the recently announced Microsoft Surface. In all our work with partners and on our own devices, we will focus relentlessly on delivering delightful, seamless experiences across hardware, software and services. This means as we, with our partners, develop new Windows devices we'll build in services people want. Further, as we develop and update our consumer services, we'll do so in ways that take full advantage of hardware advances, that complement one another and that unify all the devices people use daily. So right out of the box, a customer will get a stunning device that is connected to unique communications, productivity and entertainment services from Microsoft as well as access to great services and applications from our partners and developers around the world.

A great example of this shift is Windows 8. Windows 8 will come to market Oct. 26, 2012, with beautiful hardware that will light up with our consumer cloud services. Windows 8 unites the light, thin and fun aspects of a tablet with the power of a PC. It's beautiful, it's functional, and it's perfect for both personal and professional use. Xbox Music, Video, Games and SmartGlass apps make it possible to select a movie from a PC, start playing it on the TV, and finish watching it on a phone. SkyDrive, our cloud storage solution, effortlessly connects content across a user's devices. Bing's powerful search technologies in Windows 8 will help customers get more done. Skype has a beautiful new Windows 8 app and connects directly into the new Office.

Office, too, is taking a major leap forward. The new Office was designed from the ground up for Windows 8 and takes full advantage of new mobile form factors with touch and pen capabilities. It unlocks new experiences for reading, note taking, meetings and communications and brings social directly into productivity and collaboration scenarios. The combination of a Windows 8 tablet with OneNote and SkyDrive has truly revolutionized how to take notes, annotate documents and share information. The ultimate experience with the new Office for both consumers and businesses will come when it is paired with a Windows 8 device and delivered as a cloud subscription service with Office 365.

Services for the Enterprise
Fantastic devices and services for end users will drive our enterprise businesses forward given the increasing influence employees have in the technology they use at work — a trend commonly referred to as the Consumerization of IT. It's one more reason Microsoft is committed to delivering devices and services that people love and businesses need.

Today, businesses face a number of important opportunities and challenges. Enterprise IT departments are tasked with deploying technology that drives the business strategy forward. They decide what solutions will make employees more productive, collaborative and satisfied. They work to unlock business insights from a world of data. At the same time they must manage and secure corporate information that employees access across a growing number of personal and corporate devices.

To address these opportunities, businesses turn to Microsoft. They count on our world-class business applications like Microsoft Dynamics, Office, Exchange, SharePoint, Lync, and our business intelligence solutions. They rely on our technology to manage employee corporate identity and to protect their corporate data. And, increasingly, businesses of all sizes are looking to Microsoft to realize the benefits of the cloud.

Helping businesses move to the cloud is one of our largest opportunities. All the online services people use today — both from Microsoft and other companies — run on servers in datacenters around the globe. The volume of Internet services used will continue to grow as people connect to the Internet from more devices for more purposes — fueling incredible opportunity in our server business. Unique to Microsoft, we continue to design and deliver world-class cloud solutions that allow our customers to move to the cloud on their terms. For example, a company can choose to deploy Office or Microsoft Dynamics on premises, as a cloud service or a combination of both. With Windows Server 2012, Windows Azure and System Center infrastructure, businesses can deploy applications in their own datacenter, a partner's datacenter or in Microsoft's datacenter with common security, management and administration across all environments, with ultimate flexibility and scale. Our business customers tell us these capabilities are critical to harnessing the power of the cloud so they can reach new levels of efficiency and tap new areas of growth.

Our Future: Big Opportunity
There's a remarkable amount of opportunity ahead for Microsoft in both the next year and the next decade. As we enter this new era, there are several distinct areas of technology that we are focused on driving forward — all of which start to show up in the devices and services launching this year. Leading the industry in these areas over the long term will translate to sustained growth well into the future. These focus areas include:

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It truly is a new era at Microsoft — an era of incredible opportunity for us, for the 8 million developers building apps for our devices, for the more than 640,000 partners worldwide and, most important, for the people and businesses using our products to reach their full potential.

We see an unprecedented amount of opportunity for both this year and the long term. Although we still have a lot of hard work ahead, our products are generating excitement. And when I pause to reflect on how far we've come over the past few years and how much further we'll go in the next one, I couldn't be more excited and optimistic.

As always, thank you for your support.


Steven A. Ballmer
Chief Executive Officer
October 9, 2012

Today's tech news roundup looks into the limitations of Microsoft's new music-streaming service, Xbox Music. It debuts on the Xbox 360 on Tuesday, but aside from a 30-day trial period, it won't come free. The streaming service, which syncs music across devices, costs $10 a month to be used on the Xbox 360 and on Windows Phone 8. There will be a free ad-supported version for Windows 8 PCs and tablets, but playback time is limited to 10 hours a month after the first six months. When Windows 8 arrives October 26, Xbox Music will be the default music player.

I read these tech pundits and journalists discussing how hard it's gonna be for the general public to learn the new UI of Windows 8. Nonsense. This video (sorry for the poor video quality - I have no proper video equipment whatsoever) is my response to such pessimism.

For the record, I do whatever I can to keep my boy *off* the computer. We watch some sesame st videos at night and play a game or two during the day. And over the past month that we've had Windows 8 on this computer this is how well he uses it. I could easily teach him some of the even more in depth operations of the system if I didn't think it more important that he interact with the real world.

The long and short of it is: If my 3 years old son can learn Windows 8 through very moderate usage, anybody with half a brain can do so too.