Windows XP follows Windows 2000

The software, called Whistler while it was being developed, will be available in two versions - one for home users and one for businesses - built upon the same basic computer code.

XP is a key stepping stone in Microsoft's transition from being a simple seller of software to a provider of net-based subscription services. But many of the features included in the early versions of XP have some analysts wondering if it will succeed.

"Microsoft is taking a number of steps that from the outside appear rather draconian and unpleasant," said Dan Kusnetzky, vice president of systems software research at analysts IDC.

"I'm puzzled in some cases as to why it is doing what it is doing."

MP3

To begin with, Microsoft is limiting what people can do with the music they create or listen to on their PC. In mid-April, the Wall Street Journal reported that XP will limit the quality of MP3 files it creates. Typically anyone creating MP3s chooses how good or bad they sound depending on what they want to do with them. Many sacrifice sound quality when preparing MP3s for portable players to ensure the gadget can hold a lot of tracks.

But the MP3-creating software in XP performs poorly in comparison to Microsoft's own audio recording format. Music recorded and played back under the Windows Media Audio format will take up less space and sound better.

Microsoft claims the change was made to help music industry partners protect copyrighted tracks, but many see it as a bid by Microsoft to drive people to its software.

"I don't think it will fly," said Carl Howe, principal analyst at Forrester Research. "Microsoft is taking the view that consumers are too ignorant to download other MP3 makers that are out there and I don't think that's true."

Mr Howe said the enormous popularity of MP3 on the web showed people were willing to find, download and install software, as they needed it.

Anti-piracy

To help the music industry combat piracy, Windows XP does have the ability to stop people playing pirated pop. Inside XP is a system called Secure Audio Path (Sap), which ties tracks to the music-playing hardware on your PC. This software adds noise to music tracks that is removed only when the track is played through a trusted sound card.

Eventually Sap could be used as a content management system by Microsoft that will let it make people pay to listen to music. But it is not yet clear if and when the Secure Audio Path system will start to be used.

Analysts say Microsoft is also taking a risk with XP's anti-piracy system. When XP is installed as an upgrade, it scans a PC's hardware and generates a "fingerprint" that must be sent to Microsoft, along with the software's product key, within 30 days of installation. Changing the hardware, by installing a new graphics card, could stop XP working.

The anti-piracy system is intended to ensure that each copy of XP is used on one machine. But it could inconvenience businesses that typically upgrade rather than buy new. It could also annoy home users who have to spend time convincing Microsoft they are not a pirate. Some might just be making changes to their PC to ensure that XP runs better on it.

Rental

The biggest change Microsoft users will see turns software from something you buy into something you rent.

At the moment, Microsoft gets its revenue from big upgrades of Windows and its associated applications. To change this and guarantee more regular income, Microsoft is turning its software into services users subscribe to.

But this has its risks too. "People are only going to value and keep up with the subscription if they get something for their money," said Mr Howe. "If Microsoft does not innovate in user-visible ways, that will put real pressure on the subscription model."

People also may be reluctant to pay for features that they never use and for upgrades which fix bugs which should not have been there in the first place.

Disgruntled customers could turn to the Linux operating system and use Win4Lin or Wine software to run their old Windows applications on top of this rival software.

Hand-in-hand with these subscription services goes Microsoft's ambition to become a custodian of the information people store on computer and telephone networks. For a fee, Microsoft will look after this information and ensure it is accessible from any and all of the gadgets people use to get at bank details, address books, diaries and documents. But many people may be unhappy with handing this control to Microsoft.

"It's not at all clear that people will accept these, considering Microsoft's use of personal information in the past," said Mr Kusnetzky. "Microsoft has never had an excellent track record on security."