The United States is driving away the world's best engineers and computer scientists by putting limits on H-1B visas and other immigrant worker programs, Microsoft chairman Bill Gates told U.S. lawmakers Wednesday.

Gates repeated his past calls for more H-1B visas, the controversial program used by technology and other companies to hire foreign workers for up to six years. More than half of the students in computer science programs at top U.S. universities are from other countries, but a limit on H-1Bs means many of those students can't stay in the United States after they graduate, Gates told the House of Representatives Science and Technology Committee.

"We provide the world's best universities ... and the students are not allowed to stay and work in the country," Gates said. "The fact is, [other countries'] smartest people want to come here, and that's a huge advantage to us, and in a sense, we're turning them away."

Gates' comments on immigrant worker programs and improving science and engineering education at U.S. high schools reflected his long-standing positions. Gates talked about the same issues before a Senate committee a year ago. Congress has set a limit of 85,000 H-1Bs each year, including 20,000 set aside for students with advanced degrees, and in recent years, those slots have been filled within days of the application period opening.

Many lawmakers agreed with Gates on H-1Bs and other issues, but some raised concerns about raising the H-1B limit. One recent study said 150,000 computer programmers in the United States have lost their jobs since 2000, said Rep. Dana Rohrabacher, a California Republican.

"My view ... is there are people available," Rohrabacher said. "You just want to hire the top people from India and China."

Gates said Rohrabacher's numbers were based on a flawed study. Many large tech firms can't find enough qualified workers, he said.

Rohrabacher asked if H-1B workers were driving down U.S. wages or replacing "B and C students" from the United States. Gates said no, citing a study released Monday by the pro-immigration think tank the National Foundation for American Policy, saying that for every H-1B position applied for, companies create an additional five jobs.

"The top people are going to be [paid] higher," Gates said. "It's just a question of what country they're working in."

Rep. Laura Richardson, a California Democrat, challenged Microsoft and other tech companies to fund scholarships for science and engineering students with the money they use to recruit workers and apply for visas.

The Bill and Melinda Gates Foundation provides scholarships for 14,000 minority students, Gates noted. But more scholarships won't solve the problem of a lack of U.S. science and engineering students, he said.

"Scholarships can be helpful, but I'm not sure that alone would drive the shift we need," Gates said.

Gates called on Congress to increase the H-1B cap. He also asked lawmakers to extend the 12-month period foreign students can stay in the United States after they graduate without obtaining a new visa. He asked Congress to allow immigrant workers to more easily become permanent U.S. residents, and he called on Congress to do away with country caps on the green-card employment visa program, which has a total cap of 140,000 workers per year.

Gates also encouraged lawmakers to focus on improving high school education in the United States, to pump more funding into government research, and to approve a permanent research and development tax credit.

"I believe this country stands at a crossroads," he said. "Economic progress depends more than ever on innovation. If we do not implement policies like those I have outlined today, the center of progress will shift to other nations that are more committed to the pursuit of technical excellence."

After weeks of speculation, it appears that the general public will soon be able to get its hands on the first beta of Microsoft's follow-up to Windows Vista. A message on the MDC (MSDN Developer Conference) site states that all attendees of the upcoming MDC events, a series of Microsoft-sponsored road shows running from early December through mid-February, will receive a Windows 7 Beta 1 DVD in the mail "when they become available."

Microsoft isn't giving an exact delivery date for the Windows 7 beta, but some reports speculate the disc will be ready before January 13.

[ InfoWorld's Randall C. Kennedy and OSNews' Thom Holwerda debated the best way to assess Windows 7's changes ]

Some bloggers, the few who've actually tested the pre-beta code, have voiced concerns about the Windows 7 feature set. Infoworld's Randall C. Kennedy, for instance, recently declared that Windows 7 was essentially a slightly tweaked version of Vista. Other reports have praised-with some reservations-Windows 7's interface improvements, such as a vastly remodeled Windows Taskbar.

Microsoft has indicated that Windows 7 will likely be ready by late 2009 or early 2010, and given the lack of spectacular new features in Vista's replacement, there's no reason to think that Redmond won't meet that timeline. Certainly, the average Vista user would be thrilled if the hated User Account Control security feature would simply go away. Early indications are that it won't, but UAC will undergo some major changes in Windows 7.

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IT vendors may be growing increasingly desperate amid the global economic downturn, but customers must employ a range of tactics -- not just bullying -- to extract cost savings from them, a group of Forrester Research analysts said during a client teleconference Wednesday.

Companies simply can't use a shotgun-style approach and expect to succeed, said software licensing analyst Duncan Jones: "Anything that is undifferentiated, like a general letter that goes out [to vendors] saying we've got to cut everyone's maintenance by 10 percent? That's not going anywhere."

[ For more on how to deal with the recession, check out InfoWorld's special report: IT and the financial crisis. ]

Analyst Paul Roehrig, who focuses on outsourcing and IT services, said it is difficult and awkward to extract price concessions on a signed contract.

"Either you're begging or threatening.... Those [tactics] tend to work, but only for a short time," he said, adding, "unless you're really overpaying, there's really not that much room in the provider's margin where they can lower the price point without changing the service level."

And if a customer does succeed in lowering its services costs, "the vendor is going to immediately substitute junior people," said analyst John McCarthy, whose coverage areas include offshoring.

Instead of begging for a rate cut, customers could instead ask their vendors to assign more seasoned workers to their projects, resulting in productivity gains and cost savings, McCarthy said.

Meanwhile, the tactics are different for software licenses and maintenance agreements, according to Jones.

"One of the problems is, you're dealing with a software rep who has different goals than you. He needs to sell new licenses and has no interest in helping you cut costs," he said. "But if you get up higher in the organization, there are going to be people who care more about the long-term relationship, and there's flexibility there."

That said, now is the time to push for bigger discounts on new licenses, as sales representatives "are desperate to meet their number by end of the year," Jones added.

Companies could even indicate they'd be happy to let any outstanding deals float over into 2009, he said: "That will probably be too late for the rep, so try it as a tactic and see how much flexibility you've got."

Also, customers could use money they're prepared to spend on new software as leverage, Jones said: "Anything you're trying to get, like cutting maintenance on products you're not using, you might be able to get that as a quid pro quo for spending in another area."

Beyond maximizing their buying power, companies should save money by determining which software assets no longer need a maintenance contract, Jones said: "You save costs with minimal impact on the business, but you put pressure on other vendors because it shows you're seriously looking at everything."

A similar approach should be taken to IT services contracts, Roehrig said. "If you're asking for the highest levels of service, you're going to be paying top dollar, when the reality is that the enterprise can function just fine with not everyone having gold-plated service."

Companies should also try to get more value out of outsourcing in general through strategic hiring, he said. "If I had money as a client to invest in one thing ... I would get someone who really knows how to manage a service provider. Some of the best outsourcing deals I've come up against have really good people who know how to get a service provider to do what you want."

Customers should also seek to lower the total number of service providers they contract with, leading the way to bigger volume discounts, Roehrig said. But he noted that this can be difficult for heavily federated organizations to accomplish.

It's also possible to save money by actually helping one's vendor cut costs, according to Jones.

If four divisions within a company are negotiating separately with a vendor, they should consider consolidating those relationships, he said: "I would go to the vendor and say, how can I earn cost reductions by dealing with you in a centralized fashion?"

Microsoft on Wednesday unveiled a free plug-in for Firefox to translate Open XML documents, an update to its document translator, and a toolkit for Java developers that was built under the umbrella of its Document Interoperability Initiative.

The group released the OpenXML Document Viewer as an open source project on its Codeplex Web site. The viewer translates documents in the Open XML format, which became an ISO standard in April after much contentious debate , to HTML so they can be viewed on a browser. The viewer, which is still in the preview stage, eliminates the need for a user to install Microsoft Office or any other productivity tool set.

[ Discover the top-rated IT products as rated by the InfoWorld Test Center. ]

The first implementation developed by MindTree and Microsoft works with Firefox 3.0 running on Windows or Linux and translates font types, images, text styles, diagrams, tables, and hyperlinks. In early to mid-2009, the project will add support for Opera and add server-side features.

The software was released during a Document Interoperability Initiative (DII) meeting this week in Belgium.

Microsoft created DII in March with the help of Novell, Mark Logic, Quickoffice, DataViz, and Nuance Communications. The goal was to foster interoperability between document formats, most notably Open XML and the Open Document Format (ODF).

"Basically this is Microsoft sincerely going out and following up with what they did with OpenXML," said Peter O'Kelly, principal analyst with O'Kelly Consulting.

As part of that follow-up, Microsoft plans to support ODF in Office 2007 SP2, which is slated to ship next year.

On top of the Firefox plug-in, DII released Version 2.5 of the Open XML/ODF Translator , which supports Office 2003, 2007 and XP. The new version includes a set of ODF 1.1 compatible templates and chart enhancements for spreadsheet programs.

The templates provide preformatted documents, such as a business letter or fax sheet, that are based on either ODF or Open XML and allow predetermined conversions between formats.

DII also introduced an software developer kit for Java developers that aids in working with Open XML documents. The project aligns with the Apache POI project, which provides Java libraries for reading and writing in Microsoft Office formats.

All the DII software was released as open source projects.

"We have been seeing that a lot of people now understand that what is most important is the end user," said Jean Paoli, general manager of interoperability strategy for Microsoft. "Since for maybe a year now, we are seeing far less passion about the format issue and more rationality."

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Scotland is to host two pioneering datacenters, with plans being announced to build an eco-friendly cloud centre in Inverness, and the world's largest computing facility in Lockerbie.

A new business park, a "sustainable village" with hundreds of homes and what is claimed to be the world's largest datacenter, are to be built in the south-west of Scotland under an ambitious £800 million development plan.

[ Find out more on being environmentally responsible while saving money. And stay up to date on green tech with InfoWorld's Sustainable IT blog, with our Green Tech Topic Center, and with the Green Tech newsletter. ]

The Peelhouses datacenter in Lockerbie, which is being built by Scottish firm Lockerbie Data Centres, will use green energy generated from wind turbines and a new bio-mass power station.

The entire facility will be spread over 250,000 square metres, including the development of 800 new homes in the village. Waste heat generated by the banks of computer servers will be reused to heat the new village as well as the existing town, and the business park

Scottish IT services company Alchemy Plus, with backing from Microsoft, has revealed plans to build a £20 million cloud computing center on the Inverness harbour. Inverness was chosen as an ideal site for the large computing facilities because of its cold climate, which Alchemy intends to harness to reduce the need for cooling.

[ Learn more about what cloud computing really means from InfoWorld's cloud computing primer. ]

The 20,000-square-foot facility is billed as Scotland's first eco-friendly computing facility, with the heat created by the center being used to warm nearby businesses, including a nearby hotel.

The Inverness center will operate on a cloud computing model, enabling users to subscribe on a monthly basis for the IT resources their businesses uses. Alchemy claims this companies that took part in an 18-month pilot saw an average cost savings of 28 percent.

Lockerbie Data Centres still waiting for planning permission of its plans, but chief executive John Hume said he had already received interest from a number of IT firms keen to get involved with the project.

Hume said: "The worldwide shortage of suitable data storage and the high demand for local affordable housing presents a unique opportunity for Scotland and local residents."

"With global demand for data storage expected to double by 2012, demand already outstrips supply."

Chief executive of Alchemy Plus, Peter Swanson, echoed similar sentiments on the demand for datacenter space. "The current economic downturn is driving a rapid shift towards cloud-based services which offer greater economy and flexibility."

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VMware has introduced View 3, the updated version of its virtual data infrastructure (VDI) offering. The company claimed that the new product would reduce desktop storage demands by as much as 70 percent.

In addition, the company said that it could "decouple" a desktop from specific locations to create a personalized view of that desktop, accessible from any other device -- so that a desktop could now be visible from a laptop in another office.

[ Read about VMware's VDI Storage Considerations guide. And stay up to date on the latest virtualization developments with InfoWorld's Virtualization Report blog and newsletter. ]

Jocelyn Goldfein, VMware's global manager for its desktop business said that the move supported the current trend towards mobile working. "Users are no longer tied to a desk," she said. "They use PCs, thin clients, notebooks or even smartphones."

Goldfein said that View3 was part of the vClient initiative announced at VMWorld. She said that the company was now looking at the desktop in the same way that it had looked at the datacenter. "The problem with desktop virtualization is that you still need a device. When you consolidate in a datacenter, you can get rid of 90 percent of the servers, you can't do that with the desktop." She added that View 3 would help bring virtualized desktops to devices.

The main element in View3 is View Composer. This uses a new technology called Linked Clone to generate many virtual desktops from a master image. Only desktops could be created in seconds and centrally controlled by View Manager.

Tommy Armstrong, VMware's senior marketing manager for enterprise desktops said that View 3 users would be able to provision many machines with common software -- for example, Windows, with that "golden master" as VMware calls it. He said that this could also be used for patch management.

In addition, the company has released Offline Desktop, a feature that provides the means to securely move virtual desktops between the datacenter and a local laptop or desktop. The company claimed that this would enable users to "check out" a virtual desktop onto an ordinary PC, such as a laptop, run the virtual desktop locally, and then check it back in to the datacenter.

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