Microsoft has made a dramatic retreat from its lofty goals for Longhorn, revealing that its highly touted storage subsystem will now not ship with the operating system.

The WinFS storage and search technology will still be in beta when the Longhorn ships in 2006, the software giant confirmed. Although it comes alongside the news that a big component will be missing, this is the first time Microsoft has confirmed a ship date for Longhorn. The server version is still set for release in 2007.

One analyst was not impressed with the news. "I question what is left of Longhorn. I just don't know until we have more details," said Peter Pawlak of Directions on Microsoft. "What will be the difference [in Longhorn] from a Windows XP box with WinFX [MS' new application programming model]?" says Pawlak.

The changes make Longhorn more of an evolution from Windows XP rather than the revolution in desktop computing that Microsoft has been touting, Microsoft officials admitted. "The path to get to our very ambitious vision for Windows is different and is more evolutionary in appearance rather than one big leap like we have described in the past," said Greg Sullivan, lead product manager for the Windows client group at Microsoft.

But Sullivan did say Longhorn would be distinct from Windows XP and Windows Server 2003. "There will be differentiation features available in Longhorn, from the fundamentals of the core OS kernel, to performance, reliability and security and a host of management tools and an error-reporting infrastructure - all the things that IT is interested in," he said. Longhorn would ship in the second half of 2006 and would be "broadly available" by the end of that year.

At its Professional Developers Conference in November, where Microsoft distributed a pre-alpha version of Longhorn, Microsoft's chief software architect Bill Gates said Longhorn would provide opportunities for developers that would be stronger over the next decade than at any time in history. Since Longhorn's components will now be rolled out over time, that looks like little more than tough talk. Once it does ship, WinFS will also not work with older versions of Windows.

WinFS' delay takes the shine off Longhorn. Gates said in November that it was the realisation of a 10-year dream for him around search technology and termed it his "Holy Grail." The storage subsystem is designed to break data away from individual applications and interfaces so it can be stored and shared universally. It will also allow data searches across the desktop PC, network and Web services.

A Microsoft spokesman said Longhorn would include local desktop searching as a hint of the power in the relational database capabilities of WinFS.