The digital home server will be able to centrally hold all video, music and images in a home so that users can access it wherever they are, via Windows Live .
According to Gates, "Windows Home Server is for homes where you've got either multiple PCs, or Xboxes, the case where you want to have your storage available at all times to the different devices".
Co-developed with HP, the server will be branded the HP Media Smart Server, with the Windows Home Server software running on top of that, Gates said. Throw in the Xbox and other hardware and software, and you have the perfect Microsoft-branded picture of the future.
But will the Home Server - a box that sits on a home network providing back-up and content delivery across all devices connected to it - live up to the utopian promise delivered by Gates? After the relative fiasco of its Zune digital media player and the belated launch of Windows Vista, Microsoft is under pressure to get it right with successful new products.
If the Microsoft Home Server is as well executed as Gates hailed it to be, then it will be perfect for households with lots of digital content. A device that both backs up your files as well as deliver them to you anywhere you are would be fantastic.
Questions regaring security and stability
But will it be secure enough and will Windows Vista be stable enough to run it?
And more importantly, considering Microsoft hardware and software will be at its core, are users ready to transfer all their media content (read their entire life in photos, videos and music) to Microsoft products?
After all, its software and operating systems have always been prime targets for hacking and internet malware, and issues like identity theft and fraud take on whole new proportions considering the depth of personal information that the Home Server proposes to hold.
Rob Enderle, principle analyst at the Enderle Group , agreed, saying such a device would have to be free from the vulnerabilities and security threats of today's average home PC.
"If you have something at the home, it needs to be something that's relatively safe from viruses so that kids cannot catch a virus playing a game on the same system that holds all your high-value data. It makes sense to have [the content] on something like a server that also backs up it up," he said.
According to Microsoft, it will be possible to open your Home Server to friends, who will all have access to the central server hub. What about Microsoft's soon-to-be-released Windows Vista operating system; will it be stable enough to hold all this data securely?
Carole Theriault, senior security consultant at security firm Sophos , believes so. "From what I've seen of Vista, it seems a lot safer than its predecessor, Windows XP," she said, before adding the stipulation that normal security precautions (firewall, anti-virus systems and so on) still apply.
She added that even though companies such as Nintendo and Google may be offering rival services to those include in the Home Server, no one else is currently offering a complete package, which should be to Microsoft's gain.
But if consumers are to put all their eggs in Microsoft's basket, they'll need more than just Gates' picture of the perfect tomorrow before taking a leap of faith.