Microsoft's Home of the Future

The first sign that you are entering another world on the Microsoft campus is two lustrous wooden doors, the kind of old-money doors suited to a Medina mansion. It's a strange sight in the middle of a typical Microsoft hallway, for the most part flanked by unpretentious white doors leading to offices the size of a small dorm room. There's a doorbell, too, and ringing it offers you entrance to "the Microsoft home," which is a fully furnished living room, kitchen, dining room, and home office. Nobody lives there, of course. But since the home opened in October, Microsoft has brought in families and individuals to spend time there as if they did, while hidden video cameras watch their interaction with the computers that grace every room. The company also uses the facility to experiment with interactive TV and other kinds of electronic devices that promise to bring us closer to the gadget-filled lifestyle of the Jetsons. That Microsoft went to the trouble and expense of building an actual home testifies to the seriousness with which it is pursuing the consumer market, as distinct from the business market, which has provided the bulk of its revenue during the company's 20-year existence. Indeed, the company is building a separate 36-acre campus for its rapidly expanding consumer division. The five-building campus, which will be located across 148th Street from its central Redmond campus, is to be known as Red (short for Redmond) West. Yet, while conventional wisdom has it that the home market offers the most growth, it also faces a number of obstacles, including the challenge of making software that can compete with movies, books, and conventional TV. By watching families use the Microsoft home, the company hopes to learn "how people desire to incorporate technology into their life -- if in fact they do," says home coordinator Yukiko Shinoda. Microsoft has perhaps overloaded the space with technology for testing purposes, but it offers insight into the company's vision for the home of the future. Mind you, this is a home for the affluent, filled with conservative modern furniture (the dining-room table seats 12) and objets d'art. Electronic images beam from six different places. As you walk into the living room, you can see two screens at once: one of jumbo proportions against the living room's back wall, and a more moderate screen directly across in the attached kitchen. Giving the room a somewhat dizzying feel, both screens run and rerun a prototype of an interactive TV commercial for Gatorade featuring frenzied athletes, while sound is piped in from out-of-sight speakers. A third screen is in the home office, concealed in a wooden cabinet. In this household, there is no clear distinction between TV and computer screens, or monitors. Every screen -- including three attached to computers -- can display either TV or computer images. In fact, sitting before one screen, you can call up the images displayed on any other screen in the home, which raises new issues concerning family privacy. "Say, you're sitting in here," Shinoda says while in the living room, "and you think, "Gee, I wonder how Johnny is doing on his homework?'" A few moves on the remote control will bring to the jumbo screen whatever Johnny's doing on his computer, whether it be writing an essay or playing Doom. This model of an electronic appliance with multiple functions -- or "convergence" as its known in the industry -- assumes some kind of resolution to the current war between computer, cable, and telephone companies over what kind of communications appliance will dominate in the future home. The first of the home's three computers is in a corner between the living room and the kitchen -- "between two public spaces," Shinoda says, so that mom or dad can use it "without losing connection to the family and what's going on in the rest of the house." Another is in a children's nook off the dining room, and a third is in the home office. Ever worried about the competition, Microsoft won't disclose much about the experiments that go on there. But Shinoda does say that the company is exploring electronic enhancements for the refrigerator door. Rather than holding magnets, it could receive messages from a pager or cellular phone, Shinoda says. Each family member might have an icon that you could touch to receive a message. Having just announced that it is producing a multimedia title with Julia Child, Microsoft is also looking at creating a computer operated by a foot pedal to make it easier for chefs with flour-covered hands. As these experiments continue, Microsoft's 600-person consumer division is churning out more and more multimedia titles, currently producing an eclectic mix of 75 titles. These include the companies flagship Encarta encyclopedia, the "Magic School Bus" series for children, and titles on golf, dinosaurs, architect Frank Lloyd Wright, and classical music. Microsoft says the division earns an estimated $500 million annually. Another of Microsoft's efforts to become a major player in entertainment technology is the company's recent joint venture with Hollywood powerhouses Steven Spielberg, Jeffrey Katzenberg, and David Geffen to create Dreamworks Interactive, which is also to produce CD-ROMs. On top of that, at the National Cable and Television Association trade show in Dallas last week, Microsoft gave demonstrations of its version of interactive TV, which it is developing with a host of partners, including Redmond's Medio Multimedia and Bellevue's Starwave. There are sound business reasons to make such a pronounced investment in home technology. Unlike the business market, which is already saturated with computers and software, the home market is expanding rapidly. Thirty-six percent of Americans had PCs in their homes as of last December, up from 27 percent two years prior, according to Link Resources, a high-tech consulting firm in New York. Microsoft president Bill Gates recently speculated to the high-tech magazine Upside that "we're approaching the point now where within two years the majority of all US homes will have a PC." At the same time, Gates indicated that use of those computers has so far been limited. Noting that only 5 percent of home PC owners choose to hook up to an on-line service, he said: "Clearly, something -- whether it's dissatisfaction with ease of use, the richness of the content, or the cost of using the network -- is holding . . . those people back." The answer probably lies in all three, and similar factors undoubtedly account for the fact that the average CD-ROM sells to fewer than 500 people. Though multimedia is still hailed as the wave of the future, most companies in the business are failing to recoup expenses, and investors are becoming more cautious. he home market is especially challenging because it depends on people turning to computers for enjoyment, rather than productivity. In that light, last month's release of a national survey on computer preferences conducted on behalf of Microsoft, the first of its kind, brought troubling signs for the computer industry. True, a whopping 82 percent of nearly 3,000 respondents told Austin-based IntelliQuest Inc. that they thought computers were fun. Yet, the only specific home task that respondents said they would rather do by computer is saving recipes. And when surveyors asked a subset of actual computer users how they would spend an extra hour in the day, it seemed they would rather do almost anything else besides using a computer. A full 74 percent said they would rather read a book, running counter to predictions that electronic publishing will soon make books obsolete. Given the eye-glazing presentation of most computer text, perhaps one experiment Microsoft could do in its new home is to time just how long people are willing to read on a monitor.

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