Vista:
Microsoft's Last 'Big Bang' Operating System?
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Despite forays into Web software with Windows
Live and Office Live -- collections of e-mail,
instant messaging, and Web publishing apps --
Microsoft's core franchises remain wedded to the
PC.
As he took the stage to usher
Windows Vista to market, Microsoft CEO Steve Ballmer
last week tried to put the software's laborious
birth behind him. The company's 71,000 employees
-- and the entire PC industry, for that matter
-- could be excused for breathing a sigh of relief,
too.
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"It's an exciting thing to finally
be here, and that's probably all I'll say about the
past," Ballmer said at the unveiling from Nasdaq's
cylindrical high-tech building in New York's Times Square.
Office 2007 and Exchange Server 2007 also were introduced,
and 30 more products will follow over the next year,
all part of the same technology wave. "This is
the biggest launch we've ever done," Ballmer said.
Microsoft will spend $450 million marketing it all.
Yet for all the design missteps, overly
ambitious plans, and personnel changes that led to a
five-year lag between versions of Windows, questions
about the future of Microsoft's software are top of
mind for customers and partners. Ballmer swears to never
let as much time elapse between Windows versions; the
question now is how the company can keep churning out
innovative products on a compressed timetable.
"Vista is the last of the Big
Bang operating system releases from Microsoft,"
Credit Suisse research analyst Jason Maynard wrote in
a report last month, the same day he forecast that the
company's share price would rise 20%, from $29 to $35,
within a year. That's partly on account of Vista. Microsoft
is introducing higher-priced, feature-laden editions,
which could help revenue from desktop Windows grow 9%
to 10% during the fiscal year.
Others question Microsoft's ability
to tap into the fast-growing market for Web-delivered
software. Windows and Office are Microsoft's most lucrative
products, accounting for more than 60% of the company's
$10.8 billion in revenue during the first quarter, ended
Sept. 30. "They're really tied to the fat-client
model," says Gartner analyst Michael Silver.
Despite forays into Web software with
Windows Live and Office Live -- collections of e-mail,
instant messaging, and Web publishing apps -- Microsoft's
core franchises remain wedded to the PC. Big gaps between
new versions don't sit well with business customers
who pay annual fees for the right to upgrade. Balancing
speed with quality will be key.
Now could be the time for a new approach.
Two of the principal architects of Windows Vista --
co-president Jim Allchin and chairman Bill Gates --
have assumed diminished roles, while a third, former
VP Brian Valentine, has left the company. The future
of Windows is in the hands of chief software architect
Ray Ozzie and senior VP Steven Sinofsky, who Microsoft
put in charge of Windows development last spring. Web-centric
technologies like Windows Presentation Foundation Everywhere
and a new Windows Live layer of APIs show where the
company is headed.
But don't count desktop Windows out.
"We will continue to do exciting new releases,"
Ballmer said. On the docket for the next version of
Windows: support for higher-bandwidth networks, improved
graphics and video playback, a long-awaited update to
the Windows file system, and apps that take better advantage
of the power of multicore processors.
By several accounts, demand for Vista,
Office 2007, and Exchange Server 2007 looks promising.
In an October survey of 672 business technology pros
by InformationWeek Research, 39% said their companies
would install Vista within a year of its release. Verizon
Communications and Viacom's MTV Networks plan to install
Vista on thousands of new PCs in short order, and Microsoft
expects 200 million PC users to have one of its three
new products installed by the end of 2007. Microsoft
is touting the products' ability to let workers communicate
and find information more efficiently, while helping
IT departments keep PCs more secure, deal with government
regulations, and lower IT support costs.
Microsoft plans to deliver 30 additional
business products in the next year that add even more
capabilities to Windows, Office, and Exchange. Those
include add-ons to Office for data mining and real-time
communications, and Internet phone calling and videoconferencing
within Vista.
Vista and Office won't come preloaded
on new PCs till Jan. 30, the date of Vista's big consumer
launch. Companies that want them now must upgrade their
PCs, never an easy task. Vista is "going to want
better-performance processors, more memory, and newer
configurations," says Margaret Lewis, director
of commercial ISV marketing at Advanced Micro Devices.
Vista will run on underpowered hardware,
but only with its new Aero graphical user interface
and other features disabled. How can IT departments
know whether PC hardware is up to the task? "That's
the $64,000 question," says Lewis.
Microsoft, of course, wants customers
to adopt its new products quickly. Last week's demos
included the newly designed Windows Start menu, which
consolidates commands and incorporates desktop and network
search-engine software, and features the ability to
use an on-screen calendar to graphically search for
documents based on when they were created. An Office
add-on called Outlook Voice Access lets users check
voice mail and e-mail using verbal commands, hear an
e-mail read by the computer, or manage a calendar by
voice.
Such features will be key, Ballmer
suggests, in helping workers deal with information overload,
companies become more distributed, and business managers
deal with Sarbanes-Oxley and other regulations related
to data storage. "The world's changing," he
said. The software business is also in flux, and Microsoft
has its work cut out there as well.
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