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Microsoft India has announced that it will work with organizations to help leverage technology to drive cost control and efficiencies to weather the challenges of the downturn.

To this end it has launched a web site titled controlcosts.com, an IT knowledge resource for organizations looking to streamline operational costs.

The website provides information and guidance on solutions to solve business dilemmas faced by organizations from containing costs to enhancing efficiency to energy consumption.

The global economic meltdown has forced companies across the globe and in India to look for ways to cut costs and reduce risks as they confront issues like tighter credit, reduced business activity, and slower consumer spending, while maintaining business agility. We believe that technology provides powerful tools that can help companies reduce costs by enabling them to operate with greater efficiency and effectiveness, automate processes, and to do more with fewer resources. , said Rajan Anandan, MD, Microsoft India.

For instance, using Microsoft CRM solution, Liliput Retail has been able to increase efficiencies of its warehouses by 60 percent and also maintain a healthy turnover rate. Similarly, Lavassa Corporation has reduced response time to customer queries from one day to immediate action and has saved 20% in payroll by streamlining the sales operation with CRM solutions from Microsoft.

According to a McKinsey report of 2008, targeted IT investments can make operations more efficient and increase revenues, delivering returns larger than simple cost cutting measures typically do. As Roger Killick, IT manager, Siemens Standard Devices believes, Hyper-V gives us all the virtualization features we need in a very cost-effective package. It’s an excellent investment, because we’ll also save money on future training and support costs.

Strategic and innovative use of technology can deliver huge Return on investment in the short term and further, create conditions for more rapid growth when the economic climate improves , added Anandan.

With controlcosts.com, Microsoft aims to provide one stop tool for CFOs, CIOs and CXOs to learn how to identify high cost operations and streamline costs by leveraging technology solutions such as virtualization, unified communications, Customer relationship management (CRM), Enterprise Resource Planning (ERP), Business Intelligence and hosted services.
Readers can also access industry reports and whitepapers on the above mentioned solutions and view case studies of how organizations in India have used the solutions to achieve significant cost reduction and streamlined business processes.

Software major Microsoft has come up with Release Candidate 1 (RC1) for Internet Explorer 8 (IE8) in 25 languages. “IE8 RC1 is much faster than previous versions of Internet Explorer, so you’ll notice that difference right away. IE8 is also your personal explorer, with customizations that will enable an online experience,” said Rajiv Popli, director for Windows at Microsoft India.

This new offering includes Accelerators and Web Slices, which allow users access online services from any Web page they visit as well as easily stay connected with information that they want the most - without having to visit the website, said Popli. The offering includes an array of Accelerators such as Live Search, Amazon, Yahoo!, Wikipedia, Facebook, eBay, besides other popular sites.

The add-ons offer large amount of resources within a couple of clicks of the Web page visited. Instead of opening a new tab to look up for a search term on Yahoo or Google, users can simply highlight the term and click on the search page accelerator for an instant reference, thereby eliminating navigation to other Websites. In addition, users can discover other useful Accelerators through selection from More Accelerators option on the right-click menu.

Also, the company has initiated a platform-based approach to Web Slices that can enable virtually any developer to create them by merely adding a few lines of code to existing pages. Through this, users can update sites directly from the new Favorites Bar.

Microsoft is also working with partners to create more Web Slices for favorite sites. “IE8 RC1 will help keep users protected against the ever-evolving online threats - things like protection from cross-site scripting attacks that no other browser offers,” said Popli.

Internet Explorer 8 RC1 is available for download, while its localized versions can be installed on Windows Server 2003 or XP in accordance with the base language of the operating system with that of IE8, and can be installed in English on any localized OS version. Other languages for IE8 include Japanese, German and simplified Chinese with codes JPN, DEU and CHS, respectively.

The Dynamics CRM 4.0 will help businesses optimize costs by streamlining customer relationship management based on many customizable parameters. It can integrate with software like Outlook and Excel. The software can be deployed on premises or accessed as a hosted service and offers a familiar user interface and absolute ease of use as of Windows.

Addressing the same space of CRM for the Indian SMEs, Oracle’s ‘On Demand 16′ will offer flexibility of defining relationships and will not require the user to write code, or compile the application. Some of the key features of the release include reviewing of critical information from a single interface.

Microsoft adCenter has released the results of an online survey examining the search marketing behaviors of small-business owners. The findings indicate that a majority of the small businesses surveyed, invest in developing Web sites, but fail to take even the simplest steps to enhance their online business presence. The study said that 59% of small businesses with Web sites don’t currently use paid search marketing, and of those, 90 % have never even attempted it.

Seven in 10 small-business owners who participated said that they would rather try to do their own taxes than start a paid search marketing campaign.

“Given today’s current economic conditions, small-business owners need more effective ways to optimize their marketing dollars,” said Brian Boland, director of adCenter at Microsoft Advertising. “By investing in paid search marketing, small businesses can track online sales and determine the return on investment for their campaigns, while at the same time boosting traffic and visibility for their Web sites.”

Despite the lack of investment in paid search marketing, the weakening economy and increased competition, nearly nine in 10 (86%) small-business owners surveyed felt that they could be missing opportunities to grow their business, while three in four believed prospective customers could be searching online for the type of service their business offers. Although most do not embrace the practice, the small-business owners who use paid search marketing are very satisfied, as 72% reported an increase in sales inquiries and 68 % consider their paid search marketing efforts successful.

Among the participants’ chief concerns, most said the common misconceptions of cost, time, and complexity as major hurdles to conducting search marketing campaigns for their businesses.

Other key insights included the following:

* Nearly nine in 10 (89 %) feared keywords may become too expensive.
* 81% questioned if paid search marketing is the best use of their marketing budgets.
* One quarter of respondents believe paid search marketing is too complex.
* 21% thought it would be too time-consuming.
* 35% felt they would need an agency to help set up a search marketing campaign.

“These opinions run counter to widely held marketing industry views on paid search marketing, which recognize the practice as one of the most cost-effective, easy-to-use, measurable and accountable forms of marketing,” Boland said.

Tools like Google Analytics can enable businesses to make informed decisions about their online marketing.

Source: Microsoft

WASHINGTON (Reuters) - Search engine Yahoo! Inc will cut to three months the time it stores personal data gathered from Web surfing, making its retention policy the shortest among peers, the company said on Wednesday.

The company will “anonymize” the computer addresses of its users within three months in most cases, from a prior standard of 13 months. It is reserving the right to keep data for up to six months if fraud or system security are involved.

Internet search companies have come under pressure from European and other data protection officials to do more to protect the privacy of users.

Earlier this year, industry leader Google Inc halved the amount of time it stores personal data to nine months. Microsoft Corp has said it will cut the time to six months if its rivals did the same.

“Google first went to 18 months and started this competition,” said Ari Schwartz, vice president at the Center for Democracy and Technology, a privacy advocacy group.

Yahoo’s pledge is “significant because they are getting rid of some data after 90 days and they actually have an implementation plan to get this done,” he added.

The company is also expanding the scope of the data it is making anonymous, to include page and advertisement clicks and views, from just search log data alone.

The European Union has recommended that companies keep data no more than six months and urged the sector to adopt an industry-wide standard.

“This was our attempt to put a stake in the ground” on the issue, Yahoo vice president of policy and privacy chief Anne Toth said.

Internet search engines get their revenue by matching advertisements to searches, so advertisers can peg their ads to what is on the searcher’s mind.

RIVALS WEIGH IN

Microsoft said it welcomed the move, but made a distinction between the timeframe and the method of making data anonymous.

Yahoo will delete the final segment of the Internet Protocol (IP) address, which it said makes it no longer unique or identifiable.

Microsoft is deleting all of the Internet address, which it said will break any potential link to a particular set of search queries, according to Brendon Lynch, director of privacy strategy at the software giant.

“The best anonymization is to get rid of all the identifying information,” Schwartz said. “We are still not there on an industry standard.”

Google reiterated in a statement its current policy of nine months and said it is “continually evaluating” its policies with respect to privacy.

Ask.com, owned by IAC/InterActiveCorp., recently offered customers the ability to “opt out” of having their information stored for more than a few hours.

Yahoo’s Toth said the company is not considering such a policy.

Once the companies make commitments on data retention, they are enforceable under federal and state laws in the United States, Schwartz added.

Source: Yahoo

With the economy in the shape it’s in, even Microsoft and Google are thinking twice before dropping $100 million on a new datacenter. But the two tech giants are easing off the funding pedal for different reasons.

Google (NASDAQ: GOOG) has delayed breaking ground on a planned Oklahoma datacenter by 12 to 18 months, and appears to be going a little slower with a planned North Carolina center. It decided to pass on a $4.7 million state grant to build a data center in the town of Lenoir, N.C.

In the case of Microsoft (NASDAQ: MSFT), a source close to the construction of its planned Chicago, Ill. datacenter said work has been scaled back and many modular containers being used at the site are just being parked but not hooked up. Also, the company has yet to begin construction on a West Des Moines, Iowa datacenter despite announcing it with much fanfare last year.

It’s no surprise such projects would be delayed. Datacenters are about the most expensive capital project a company can undertake. A raised floor datacenter costs between $1,000 to $2,000 per square foot, making it the most expensive piece of real estate for almost any organization, according to Enterprise Management Associates. The cost of a five megawatt data center build-out can easily surpass $100 million.

Microsoft has publicly said it is cutting back datacenter expenses. On the last quarterly conference call to discuss the first fiscal quarter of 2009, CFO Chris Liddell said Microsoft would trim capital investments by $300 million, and he specifically said it would be on the datacenter side.

“We will probably also slow our growth in some of the facilities just by virtue of not having as many people as were expected as well. But that’s likely to be more of an FY 2010 phenomenon,” said Liddell.

Notoriously expensive to operate

He also said $500 million would be cut in operating expenses. Datacenters are notoriously expensive to operate because of their power and cooling requirements.

Google on the other hand, has made no such commitment to cut operating expenses. “Capex is lumpy business. Think about datacenters going up. We have no plans of slowing down. You just see the nature of that lumpiness. Every extra unit of capacity is cheaper for us,” said CEO Eric Schmidt on the company’s most recent conference call.

The delay in Oklahoma is simply because Google has enough capacity now, according to spokesman Eitan Bencuya. “We figured it doesn’t make sense to build it out and sit empty,” he told InternetNews.com. “We don’t feel like we need to turn it on, we have enough capacity elsewhere. So we decided to hold off construction for 12 to 18 months and then bring it online.”

Google’s four most recent datacenter projects have been in North Carolina, South Carolina, Oklahoma and Iowa. The North and South Carolina facilities are open, and Iowa will open next year. Only Oklahoma was delayed.

It decided to pass on the North Carolina Department of Commerce offer of a $4.7 million tax incentive from the Job Development Investment Grant (JDIG) program because, rather generously, Google didn’t need the money but the state did. “Considering State budgetary constraints as well as the difficulty in forecasting our business climate, we do not believe that JDIGs would be a wise investment for both Google and North Carolina at this time,” said Bencuya.

An ill wind hits Chicago

Microsoft’s Chicago datacenter is supposed to be for its Live and on-demand strategy, and by all reports from its own blog posts, the site looks very near completion.

The site is being kept somewhat under wraps in that Microsoft has not disclosed all of the details behind its construction. This is not unusual, as Google is equally guarded when it comes to datacenter construction. The Chicago datacenter is reported to be built using modular containers, with Rackable Systems the rumored provider. However, neither Microsoft nor Rackable would confirm this.

A source close to the construction told InternetNews.com on condition of anonymity that the work at the Chicago site has been significantly scaled back and much is left uncompleted. He reports the containers are being brought in but not hooked up. “It’s being handled like a big storage facility. They might bring power in, but they are talking about it months from now,” he said.

The containers there are only being wired for environmental controls for heating and cooling. They are not being networked or connected to the Internet at all. The project has seen the number of workers cut in half, the source added.

Microsoft has already disclosed some of these cutback details. It said in October that construction and container testing at the Chicago datacenter had entered into a second phase in Chicago, resulting in a workforce reduction, from 900 construction workers working 24×7 with 3 separate shifts, to approximately 450 construction staff, working one shift of 40 hours a week.

“Online and Live services are a major focus of Microsoft, and as we continue to build out our offerings and the Chicago data center, we’re working to make the right, smart operational and data center investments for today and tomorrow,” said Michael Manos, general manager of data centers in Global Foundation Services at Microsoft in an e-mailed statement to InternetNews.com.

Things are even murkier regarding the planned $500 million datacenter in West Des Moines, Iowa, which was announced in August. When the Azure platform was announced at Microsoft’s Professional Developer’s Conference in October, the press release contained references to a number of datacenters, including Chicago, but not West Des Moines.

There often is a lag time between announcement and build-out, since these are not trivial undertakings. Microsoft told the blog Data Center Knowledge that it is in the design phase of the datacenter and plans to open it in the coming years. Beyond that, it would not discuss the facility any further.

Why delaying makes sense

Andi Mann, senior analyst with Enterprise Management Associates, isn’t surprised at the delays in datacenters. “Both companies are looking to expand their services, cloud services specifically, but the potential client base for them is holding off. Industries like financial, manufacturing and retail are all taking a hit with the recession at the moment,” he told InternetNews.com.

Given the huge cost for these facilities – Google’s South Carolina facility was $600 million – he’s not surprised they are trying to save. “There’s no reason why they should be immune to this slow down. IT is well positioned to weather the recession, People are just looking to see what they can delay,” said Mann.

The industry, said Mann, learned its lesson after the dotcom bubble burst and everyone was left with too much inventory, capacity and hardware. “IT is not running fat. IT is already running lean. IT cut back earlier in the decade and never expanded to the huge proportions of the late ’90s,” he said.

source: IN

Companies Expand Their Strategic Alliance to Advance a New Approach to Information Protection and Data Loss Prevention

Hopkinton, Ma and Redmond, Wa — Building on a long-standing, multi-faceted alliance, EMC and Microsoft Corp. today announced they have expanded their technology partnership to help companies better protect sensitive information and share it in a more secure manner. The companies will be working together with a built-in “systems” approach that helps protect information throughout the infrastructure based on content, context and identity.

The partnership will take advantage of resources and technology from Microsoft and RSA, The Security Division of EMC. Microsoft will build the RSA® Data Loss Prevention (DLP) classification technology into the Microsoft platform and future information protection products. The resulting collaboration is designed to enable organizations to centrally define information security policy, automatically identify and classify sensitive data virtually anywhere in the infrastructure, and use a range of controls to protect data at the endpoints, network, and data center. Additionally, in the near term RSA’s DLP Suite 6.5 will be engineered to integrate tightly with Microsoft Active Directory Rights Management Services (RMS) within Windows Server 2008.

Enterprises face growing risks of data leaks and an increase in compliance and corporate governance requirements. Companies recognize the importance of allowing employees, partners, customers and vendors to use business information within and across company boundaries. But this creates security challenges, as information moves across the infrastructure and is transformed throughout its lifecycle. Current information protection solutions are complex and costly. They require separate tools and lack visibility into the sensitivity of the data, the context of identity and centralized policy management.

“Companies continue to struggle to protect sensitive data across the enterprise,” said Christopher Young, senior vice president of products at RSA, The Security Division of EMC. “Point solutions require that multiple policies and technologies be stitched together and independently managed, which is costly and complex. By building technology such as RSA DLP classification into the infrastructure, Microsoft and RSA are providing a new approach that balances the need to help ensure protection with accessibility.”

RSA and Microsoft’s new approach helps address customer needs through an end-to-end solution with fewer point tools to buy, deploy and manage. By building DLP classification technology into Microsoft products, the infrastructure becomes content-aware. The solution is designed to allow customers to centrally manage and apply their information security policies, based on user identity, to wherever information lives or is used. Microsoft is an RSA DLP Suite customer, using the solution to enhance the security of data about payment, customers and intellectual property in thousands of its own file shares and Microsoft Office SharePoint sites. The company chose to work with EMC’s RSA Security division based on the accuracy and scalability of the RSA DLP classification technology, and the wide array of its out-of-the-box policies.

“Our expanded partnership with EMC’s RSA Security Division is centered on dramatically lowering the cost and complexity of information protection while allowing customers to take full advantage of perhaps their greatest asset: their information. The approach is about built-in solutions, versus bolted-on,” said Douglas Leland, general manager of the Identity and Security Business Group at Microsoft. “This collaboration is also a key example of the Microsoft commitment to helping customers secure their environments, boost productivity and reduce IT costs through solutions that incorporate both identity and security technologies.”

The first deliverable from the expanded partnership is a tight integration between RSA’s DLP Suite and Microsoft rights management technology. Scheduled to ship later this month, version 6.5 of RSA’s DLP Suite will include support for Microsoft Active Directory RMS, part of Windows Server 2008. The integration will allow customers to automatically apply RMS-based information access and usage policies, based on the sensitivity of information. In addition, the RSA solution’s integration with Active Directory will help enable customers to efficiently implement data loss prevention controls tied to employee identity or group membership.

“Embedding information classification and protection capabilities throughout the infrastructure is an ideal way for an organization to prevent sensitive information leaks,” says Gartner analyst Eric Ouellet. “The automatic application of rights management policies based on content awareness, context, and who is involved is a strong merger of two existing approaches for protecting an organization’s sensitive information that together equal much more than the sum of their parts.”

EMC offers a complete range of information security strategy, design and implementation services to help customers protect critical information, manage risk and integrate these solutions into their environments.

More information about RMS is available at www.microsoft.com/ida . Information about RSA DLP Suite is available at www.rsa.com/dlp .

source: RSA

When he starts his new job as head of Microsoft’s online services on January 5, Qi Lu will have his hands full. Chances are, his pockets are a bit fuller too.

Microsoft announced Thursday it has hired Qi as president of Microsoft’s (NASDAQ: MSFT) online services group (OSG).

Until August he was Yahoo’s executive vice president of engineering for the search and advertising technology group.

Qi brings ten years of experience at Yahoo to the new gig, which should serve him well. He will be in charge of search and online advertising as well as the company’s online information and communications services and will report directly to Microsoft CEO Steve Ballmer.

Much of the weight of Microsoft’s online aspirations will fall on his shoulders. “Qi will oversee all efforts in search, our online advertising platform, and all of our online information and communications services,” Ballmer told employees in an all company memo on Thursday afternoon, which InternetNews.com obtained.

That’s a tall order. But at least one analyst who watches the search sector thinks it was a smart move.

“They didn’t hire just anybody — they hired the guy who built Yahoo Search and he also built their monetization technology,” Charlene Li, industry analyst and founder of Altimeter Group, told InternetNews.com.

Qi’s departure from Yahoo last summer was only one of many executive resignations in the wake of first Microsoft’s failed bid to buy all or part of the company, followed by the demise of Yahoo’s advertising deal with Google under antitrust pressure.

No matter how talented and organized, however, it’s hard to conceive that a single hire will change Microsoft’s fortunes in the online space.

“I don’t think that one person can bring everything around,” Li said. “Microsoft is very far behind so there are some very big barriers to get around,” she added.

One of those barriers is its tiny market share.

According to figures from Web tracking firm Net Applications, on a global basis, Microsoft remains in a weak third place in search. MSN Search currently has a 3 percent market share while Live Search holds 1.56 percent. Combined, that 4.56 percent is still less than half (NASDAQ: YHOO) Yahoo’s search share at 10.47 percent – and miniscule compared to (NASDAQ: GOOG) Google’s 81.11 percent.

The company had hoped to solve some of that problem earlier with its original bid for all of Yahoo, and then with a second attempt, this time aimed at only buying Yahoo’s search business. Neither worked out.

While Microsoft executives say they have no further interest in buying the entire company, Ballmer told shareholders in November that he’s not closed to the idea of working out some kind of deal for Yahoo’s search business.

Among the senior Microsoft execs who will be reporting to Qi will be Yusuf Mehdi, senior vice president of the Online Audience business and Satya Nadella, senior vice president of OSG research and development.

Meanwhile, Brian McAndrews, who was CEO of aQuantive and became senior vice president of Microsoft’s advertiser and publisher solutions group after the software giant bought it for $6 billion in 2007, will “transition” out of the company. All three were reportedly interested in Qi’s job.

Yahoo! veteran to oversee Internet offerings for consumers, advertisers and publishers.

REDMOND, Washington, December 4 - Microsoft Corp. today announced that Dr. Qi Lu will join the company as president of the Online Services Group. Dr. Lu will lead Microsoft’s efforts in search and online advertising and all the company’s online information and communications services. Dr. Lu will report to Microsoft Chief Executive Officer Steve Ballmer.

Lu most recently served as executive vice president of Engineering for the Search and Advertising Technology Group at Yahoo!, where he was responsible for development efforts around Yahoo!’s Web search and monetization platforms. Dr. Lu left Yahoo! in August 2008 after 10 years of service.

“I am tremendously excited to welcome Qi to Microsoft,” Ballmer said. “Dr. Lu’s deep technical expertise, leadership capabilities and hard-working mentality are well-known in the technology industry, and Microsoft will benefit from his addition to our executive management team.”

“I am genuinely excited about the opportunities ahead for Microsoft to make an enormous impact on the online industry,” Dr. Lu said. “Microsoft has built a great foundation for its search and advertising technologies and put an amazing team of researchers and engineers in place to drive the next wave of innovation in online services. I’m looking forward to working with them to help transform the way people and businesses use the Internet to find and share information.”

Before his most recent role at Yahoo!, Lu was vice president of engineering responsible for the technology development of Yahoo!’s Search and Marketplace business unit, which includes the company’s search, e-commerce, and local listings of businesses and products.

Before joining Yahoo! in 1998, Dr. Lu was a Research Staff Member at IBM Almaden Research Center. Before IBM, Dr. Lu worked at Carnegie Mellon University as a Research Associate, and at Fudan University in China as a faculty member. Dr. Lu holds 20 U.S. patents, and received his bachelor of science and master of science in computer science from Fudan University and his Ph.D. in computer science from Carnegie Mellon University.

Lu’s first day at Microsoft will be Jan. 5, 2009. In his role running the Online Services Group, he will oversee several groups including the Advertiser & Publisher Solutions business, managed by Scott Howe who was promoted to corporate vice president; the Online Audience business, managed by Senior Vice President Yusuf Mehdi; OSG Research & Development, managed by Senior Vice President Satya Nadella; and OSG Finance, managed by Rik van der Kooi who was promoted to corporate vice president.

With the successful integration of aQuantive now complete, Brian McAndrews, former CEO of aQuantive and senior vice president of Microsoft’s Advertiser & Publisher Solutions Group, has decided to transition out of Microsoft, and will do so over the next several months, serving in a consultative capacity to Steve Ballmer and Qi Lu during that time.

“Brian McAndrews built a world-class business for advertisers and publishers and led the successful integration of aQuantive into Microsoft, setting the foundation for our next phase of growth,” Ballmer said. “While I am sorry to see Brian leave the company, I respect and understand his decision and wish him nothing but the best in the future.”

“I also want to congratulate Scott and Rik on their well-deserved promotions and look forward to their leadership in the Online Services Group alongside Qi, Yusuf and Satya,” Ballmer said.

As part of today’s announcement, several teams will move to further align resources. The field sales organizations in the Online Services Group will move to Microsoft’s centralized Sales, Marketing and Services Group led by chief operating officer Kevin Turner. This group, called Consumer & Online, will be led by Corporate Vice President Darren Huston and will include the Global Advertising Sales and Services organization, led by vice president Bill Shaughnessy.

Source: Microsoft Corp.

An analytics site finds traffic from Google.com obfuscates the operating system being used.

Net Applications caused a bit of a stir this week with a report that showed Microsoft’s operating system share had dipped below 90 percent. This played very well where anti-Microsoft sentiment was strongest, not surprisingly.

Net Applications uses software sensors at 40,000 Web sites around the world to measure traffic and come up with its stats. These stats include operating system, browser, IP address, domain host, language, screen resolution, and a referring search engine, according to Vince Vizzaccaro, executive vice president of marketing and strategic alliances for Net Applications.

However, Net Applications noticed something unusual with stats from Google.com, which would represent Google (NASDAQ: GOOG) employees, not the public at large that use its search engine. Two-thirds of the visitors from Google.com did not hide what operating system they were running, which Net Applications recorded in its survey.

One-third, however, were unrecognized even though Net Applications’ sensors can detect all major operating systems including most flavors of Unix and Linux. Even Microsoft’s new Windows 7, which is deployed internally at Microsoft headquarters, would show up by its identifier string. But the Google operating systems were specifically blocked.

“We have never seen an OS stripped off the user agent string before,” Vizzaccaro told InternetNews.com. “I believe you have to arrange to have that happen, it’s not something we’ve seen before with a proxy server. All I can tell you is there’s a good percentage of the people at Google showing up [at Web pages] with their OS hidden.”

A proxy server shouldn’t cause such a block because it would block everything, which Net Applications sees all the time. With the one-third obfuscated Google visitors, it was only the OS that was removed. Their browser, for example, was not hidden. And two-thirds of Google systems surfing the Web identified their OS, mostly Linux.

Internal deployment would make sense, as that’s the best way to test an operating system or anything else under development. Microsoft (NASDAQ: MSFT) has Windows 7 deployed over certain parts of its Redmond campus, using its staff as testers by making them work with it daily. The company refers to this as “eating their own dogfood.”

Google’s secret OS?

So what’s Google hiding? When asked, the company sent InternetNews.com a statement that it would not comment on rumor and speculation. But some Silicon Valley watchers think they know: the long-rumored software-as-a-service-oriented Google OS.

“I think they could be working on an application infrastructure, because an operating system really connotes the stuff that makes the hardware and software talk to each other, and they are not in that business,” said Clay Ryder, president of The Sageza Group.

“But as an infrastructure for building network apps, I would think Google would be working on something like that,” he continued. “They’ve been rolling out more and more freebie apps and I would think they would eventually want to make some money the old fashioned way. It would make a lot of sense that they would want to have a network app infrastructure that they could roll out most anywhere.”

Such an OS would be an expanded version of the Android OS the company recently released for mobile phones, said Rob Enderle, principal analyst for The Enderle Group. “They were clear they were going to go down this direction, with a platform that largely lives off the cloud with Google apps,” he told InternetNews.com. Look at it as the Android concept expanded to a PC.”

Both felt Google would not take on Microsoft on the operating system level, because its goal was to make that level irrelevant. “I would never expect Google to get into a desktop OS space,” said Ryder. “That just doesn’t make sense. But for a network application infrastructure that is not dependent on the hardware but just the usage of a client, that would make more sense.”

Enderle noted this would be the final piece after Google Apps, the Chrome browser and the Toolbar, which combined are the total user experience, all provided by Google. An underlying infrastructure similar to Android to run it all would be the logical conclusion.

“If you think about it, if you live off Google tools, the company that provides the experience into everything else would be Google, not Microsoft,” he said. “It’s an interesting strategy and I think it could work, but it would be premature to bring that to market because Chrome is not ready.”