Windows licensing has always been a complicated topic, but never more so than with the new “netbook” market of PCs.  Once Microsoft finally got the hint and offered a version of Windows XP for netbooks (cleverly known as Windows XP for Ultra Low Cost PCs – ULCPC) they decided they needed to put some hardware restrictions on this license so OEMs wouldn’t take the low-cost software to higher cost PCs.  My guess is that most of you didn’t even know that such an arrangement existed at all; not something they really advertise.

Everyone seemed to be hoping that Windows 7 would fix all of these issues for Microsoft and the netbook/nettop market.  Last week we got great news that MS had decided to drop the archaic 3-application limit on the Windows 7 Starter Edition (the version most likely to find its way to netbooks).  But, Microsoft has instead decided to make the restrictions on Windows 7 Starter Edition on the hardware side of things. 

This table below, provided by TechARP, shows the difference between Windows XP ULCPC and Windows 7 Starter Edition:

Max specs on Windows 7 Starter Edition decide industry direction - General Tech 3

What stands out to me about this information are just a couple of key points.  First, the screen size restriction is limited to 10.2-in as opposed to the 12.1-in.  Essentially Microsoft is creating the definition of a “netbook” in a way that we have never had anyone really nail down for us before.  There are several 12-in notebooks available today that are called “netbooks” but that may be a thing of the past. 

As far as processing power goes Microsoft says that the netbook must have a single-core processor with no more than a 2.0 GHz clock speed.  Let me get this out of the way: the GHz race is over and setting limits on the CPUs for netbooks based on clock speed alone would be crazy.  What MS has intelligently done is set a thermal dissipation limit as well: 15 watts NOT including the graphics and chipset technologies.  This will obviously push companies like Intel, AMD, VIA and maybe even NVIDIA (x86 CPU anyone?) to focus on making as powerful a CPU as they can in that 15 watt envelope and could bring about a new era of power efficient computing.

Max specs on Windows 7 Starter Edition decide industry direction - General Tech 4
Intel’s Pine Trail – the successor to the current Atom processor technology

What does this mean for the upcoming Intel Pine Trail platform that integrates most of the chipset functionality (memory controller) AND the graphics core into the processor die itself??  Will Intel still be limited to 15 watts in this case by Microsoft’s licenses?  That doesn’t really seem fair either – an OEM could use an older gen Atom CPU with a 15 watt TDP and then couple it with a 20 watt integrated graphics chipset for an overall much more power hungry, and powerFUL, computer.  Surely Intel was aware of this pending announcement, or someone at Microsoft was aware of Intel’s Pine Trail technology – what we don’t know is what the resolution to the obvious dilemma will be.

So while at first this bit of information to come out of Microsoft might seem minor on the surface, it could potentially have implications well beyond the simple cost of Windows 7 to consumers.  It’s likely that Microsoft, knowingly or not, has determined the direction of computing for years to come.  When Microsoft speaks, AMD, VIA, NVIDIA and yes, even Intel, have to listen.  And to me at least, MS is clearly tell them how to design processors for the life Windows 7.