Xbox 360 is now officially launched but in insufficient numbers to satisfy demand. Some believe this is a ploy to create an impression of a “must have” item and generate extra demand.

The new consoles, which not only serve up games but can play music, display photos and show DVDs, are the centrepiece of a strategy that will eventually involve Microsoft’s new online services hub, Windows Live, Chairman Bill Gates has said. “In the living room itself, Xbox 360 is our centrepiece and a product that redefines what goes on there.”

Gates said on Monday that he expects Xbox Live, Microsoft’s service that links gamers worldwide, to eventually work with Windows instant messenger, soon to be part of Windows Live.

SeattlePi.com reports : “Analyst Rob Enderle said the move to more closely link Xbox Live with Windows Live intends to bolster loyalty to Microsoft products. Microsoft ‘can tie that stuff together so that you as a customer become wedded to the Microsoft platform for everything you do,’ he said. Microsoft ~ and Gates in particular ~ have long touted the idea of the high-tech living room and den, but the concept is still too geeky for most people.”

The use of Xbox 360 as a Media Center extender is a grandiose attempt to link all sources of entertainment in a house and control them from a single remote. Jupiter Research, however, says that WiFi connections don’t work and only a high-end ethernet link will do. Despite Chris Anderson talking it up as as a player in his “Long Tail” scenario, some analysts believe this will not be its main selling point. Gamers will still call the tune, even if iTunes are not yet signed up.

Nowadays, of course, everything is in beta and part of a wider, developing strategy. The firment draws in revenues and ties buyers into future developments. Microsoft’s press release burbles about “midnight madness frenzy” and of “droves” of gamers trecking across California’s Mojave Desert to an “Xbox 360 oasis”.

Meanwhile, the shortages persist. One savvy gamer said the only way to get one before Christmas “is to go to Japan”.

Great buzz around the announcement in Paris that Microsoft is to submit its XML Office document format to an international standards board. The hope is to fast-track the process so that it will be in the public domain by the time Office 12 is released next year.

As with all things Redmondy though, the questions come thick and furious. When Talleyrand died, Napoleon was heard to remark, “What did he mean by that?” And so it is now. Are these formats really open? How do I know that there isn’t some sort of hidden Microsoft agenda? Why is Microsoft doing this? And those were questions from Microsoft’s own blogging evangelist, Robert Scoble.

It was also pointed out that by doing this the company may lose control of backward compatibility during the updating process which will transfer to a standards board. That compatibility is what persuades existing users to upgrade to newer versions of the Office suite. It also seems unlikely that Microsoft will fully support the OpenDocument format called for by the European Union in May 2004.

In the aftermath of the Massachusetts decision to back OpenDocuments, Microsoft must feel like a turkey having its feathers shot off one by one. Each small compromise serves to downgrade its proprietary formats as sources of revenue, so it must hope to expand the market to the extent that a smaller market share will still increase its income. It really is circling the wagons time at the House Bill Gates built.

Some futurologists are so plausible you wonder if they know something nobody else does. Alternatively, they are total fantasists. I got that eerie feeling today while reading an article by Robert X Cringely over at PBS.

His thesis? Google is about to take over the Internet (via Web 2.0) using the techniques of Wal-Mart. What are the techniques of Wal-Mart? Pile up cheap boxes all over the place and sell them cheap-cheap-cheap, proclaiming choice-choice-choice. Well, you know what I mean : pile ‘em high and sell ‘em at an empty box price.

What’s this got to do with Google? This is where it gets interesting. Apparently the devilishly “do no evil” duo has an underground car park which very few are permitted to enter. In it they have a very ordinary, and very dull, shipping container ~ one of those big boxes that shippers stack on incredibly boring freight liners.

Inside the container they are piling as much memory and processor power as modern tech will allow. According to the all-knowing frog : “about 5000 Opteron processors and 3.5 petabytes of disk storage that can be dropped-off overnight by a tractor-trailer rig.”

The notion is to plant one of these utilitarian data-centers in places where Google owns access to fiber, “basically turning the entire Internet into a giant processing and storage grid.”

They then plan to offer all manner of Web-based services which will operate with the speed and efficiency of a desktop app, and have the redundancy and backup to keep the system as resilient as it can be.

“Two years ago Google had one data center. Today they are reported to have 64. Two years from now, they will have 300-plus. The advantage to having so many data centers goes beyond simple redundancy and fault tolerance. … But most especially, they offer super-high bandwidth connections at all peering ISPs at little or no incremental cost to Google.”

This could be a disaster for Microsoft, especially, “… all the other web services companies will be marginalized. There will be startups and little guys, but no medium-sized companies. … And the final result is that Web 2.0 IS Google. Microsoft can’t compete. Yahoo probably can’t compete. … And what does it all cost, maybe $1 billion? That’s less than Microsoft spends on legal settlements each year. Game over.”

It’s a stunning scenario. Whether it’s anything more than supposition I can’t say, but it has a feasibility that leans toward “must be true”. After all, if Cringely can dream it up, so can the people at Mountain View, who ARE buying up “dark” fiber, and who are not going to become an ISP. Leaving aside assumptive logic, which joins up dots to reach astonishing conclusions, only something this big would surely interest Google after what has gone before. Owning the online world is an extraordinary prospect.

Microsoft should look to its laurels, and then beyond … and even further than that.

[Via Robert X Cringely]

Ray Ozzie the newish CTO at Microsoft has restarted his blog. He is, of course, the man Bill Gates chose to head up the drive toward Web services in an attempt to get a share of the Google-type action now that desktop apps are in retreat as a revenue source. (I’m trying to distil that explanation down a bit, really I am).

So, why is he restarting his blog : Scoble-envy? Mini-one-upmanship? Or just plain bloglonging?

What’s bloglonging? It’s that strange nostalgia (some say neuralgia) that bloggers get when they’re not blogging. Next time you need a doctor’s chit to stay off work, remember : bloglonging. With any luck we can make it a notifiable disease.

What, then, is Ray blogging about? You’d think one name would be off-limits wouldn’t you? But it’s not long before it crops up :

A couple of weeks ago, Bill and I brought life to a new initiative that, over the course of the months and years ahead, will catalyze and deliver a number of things that I’m very excited about. At that event, I said that unlike many other stealth projects I’ve/we’ve done, in this case many of our plans and offerings will evolve progressively and in the open, shaped in good measure by a dialog with you. This is not just feel-good marketing speak: the conversation related to Microsoft - its reputation, its intent and its offerings - is occurring and will continue to vigorously occur on the ‘net with or without us. I’d rather it be “with”, and I hope to add value in becoming another of the varied Microsoft voices conversing on the ‘net.

Moreover, he’s promised us more info next week (”maybe”) : “As a matter of fact, there’s a fun little project that several of us (inside and out) have been playing with for a few months that we’ve wanted to talk about more broadly, but didn’t have a lightweight way to get it out there. Now we finally have a reasonable way to kick off the conversation. Next week, perhaps.”

So bloglonging is not just confined to bloggers, then? Somehow, I don’t think Scoble or Mini have anything to fear from Big Cheese Ozzie. One to watch, nonetheless.