The signs of trouble surrounding Microsoft's massive Longhorn development project have been building for months. But on Aug. 27 the software giant bowed to the inevitable. Rather than accept another long delay in the next version of Windows , Microsoft announced that the new operating system would be released by the second half of 2006, but in attenuated form. The main casualty is a new way of storing data that's designed to make information much easier to find on PCs and networks. The decision to scale back the ambitions of Longhorn stemmed from a complex series of events. First, what started out as a routine effort to package a large assortment of bug fixes and security patches turned into a project to overhaul the leaky security of Windows XP.
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