MSFT's Next Big Hit

MSFT's major profit-producing products are unquestionably its operating system and application products. MSFT's effort to re-invogorate those profits with a post-Vista operating system upgrade may face a bit of friction, however: most businesses apparently don't plan to buy it next year (or even the year after). Forcing consumers to buy it by eliminating OEM licensing of new copies of old editions is a tried and proven strategy to get millions of users on a new MSFT operating system, of course. But even this kind of force hasn't kept MSFT from seeing losses in its operating system division, as users trying to avoid being dragged into operating system upgrades fought to avoid Vista.

Given the reception apparently gathering for Microsoft's Windows 7, one might not seem out-of-touch to expect improvement in adoption of Linux and Android as alternatives in the larger commodity PC market. With Microsoft's dominant business desktop operating system, XP, turning a decade old in just a couple of years, developers interested in leveraging new frameworks for pulling the most performance out of modern multiprocessor computing hardware may just not be drawn to Microsoft's products: the old one isn't there, and the new one isn't deployed broadly enough to expect sales. Microsoft's Win-95-style mass adoption may be a thing of the past.

When's Windows 7 going to be released, anyway? I seem to recall Longhorn going through a series of revised release dates. Has Redmond worked out how to release a product in the target year?

Release dates aren't MSFT's biggest issue, though. However, MSFT's recent history of blown deadlines may have contributed to its real problem:

The contrast between Windows 7's glowing beta reports and tepid sales forecasts -- as implied by surveys such as the KACE/Dimensional Research study--shows that, when it comes to Windows 7, Microsoft's biggest challenge may have less to do with technical matters and more to do with restoring lost credibility in the enterprise PC market.
Information Week

Given the skepticism likely endemic in the buying population after MSFT's last decade of marketing hype, I suspect the only thing that can repair MSFT's reputation for operating system software is a workmanlike release.