From The Register:

Microsoft is working on a project, codenamed Midori, to create an “internet-centric” operating system to replace Windows.

Technical details about Redmond’s alleged Windows successor emerged yesterday. According to a SD Times report, which cites internal Microsoft documents, a team, led by Eric Rudder, has been developing the Singularity-microkernel-based OS.

Midori is a distributed operating system that appears, in part, to contain elements of Microsoft’s failed 'Cairo' and WinFS projects.

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