"They are trying to focus on the fundamentals and make sure it runs well on today's hardware, rather than looking a couple of years ahead as they did with Vista," he said. He expects a further public beta before the final Windows 7 ships, though Microsoft wouldn't confirm that.

Ballmer will also announce that Windows Live Essentials, a set of hosted productivity applications, is now out of beta and available for broad use. Live Essentials includes applications like Windows Live Messenger, Live Mail, Live Writer and Live Photo Gallery.

In addition, a new deal with Facebook will include its status updates with the other social-networking applications on the Windows Live home page, which Microsoft is trying to make a hub for Internet users.

The partnerships with Dell, Verizon and Facebook are significant for Microsoft as it tries to compete better with Google, Rosoff said. "For Live Search in particular, it's an important way to get these services out to more people," he said.

Robbie Bach, head of Microsoft's entertainment division, will tout strong sales of Microsoft's Xbox 360 and say there are now 17 million active members on Xbox live.