Top 10 hurdles for Microsoft in '06

Top 10 hurdles for Microsoft in '06

Summary: Analysts at Directions on Microsoft list their top 10 challenges for Microsoft in 2006, leading with Windows Vista as the biggest hurdle it will encounter. Basically, Microsoft is fighting battles on many fronts, as I outlined in my whiteboard video.

TOPICS: Windows

Analysts at Directions on Microsoft list their top 10 challenges for Microsoft in 2006, leading with Windows Vista as the biggest hurdle it will encounter. Basically, Microsoft is fighting battles on many fronts, as I outlined in my whiteboard video. While cranking up sales for Vista and Office 12 in the second half of next year is a priority, it will be more important in 2007, when enterprises will take a more serious look.

Most enterprises aren't going to jump on Vista or the new Office until they have done serious shakedowns on the shipping code. Ballmer acknowledged that in an interview at Gartner Symposium in October. Speaking to the crowd of CIOs and IT managers, Ballmer quipped: "I'm going to trust Vista on day one. I bet most people in this audience will trust it day one--on their home computer. I'm trying to be honest among friends."

Microsoft's biggest challenge in 2006 is going to be both internal and external--shifting the development focus on applications to services and delivering services that demonstrate the company's ability compete with Google, Yahoo, and others. I'm sure we will be hearing just as much about Windows Live as Windows Vista. 

Here's the Directions on Microsoft list:

Take Vista into the Boardroom

"The Windows Client division has to tell corporate customers why they want Windows Vista, and why they shouldn't wait until they buy new hardware."
—Rob Helm, Director of Research

Lead on Application Security and Reliability

"The time has come for Microsoft to show discipline in dealing with bad applications, and to lead in the war on spyware and other malicious software."
—Michael Cherry, lead analyst, Windows

Deliver Clarity on Managed Solutions

"Microsoft needs to map out where its managed solutions effort is going, how it will differ from what partners are doing today, and how it will kick-start financial growth."
—Paul DeGroot, lead analyst, sales and support

Get Going on Tools

"Parts of Vista like the Web services framework cry out for tools. Microsoft needs to get Vista tools out to developers, particularly to Visual Basic developers who are less comfortable programming to a raw API."
—Greg DeMichillie, lead analyst, developer

Refresh the Online Strategy, Again

"Microsoft's online strategy has had more facelifts than an aging movie star. The latest strategy could deal with the Google threat, but Microsoft must get its new advertising platform up and running and clarify its offerings for small businesses."
—Matt Rosoff, lead analyst, consumer and corporate

Small and Medium Business: Get Beyond Naming

"Results in 2005 didn’t demonstrate that the unit has the right size, channel, and product lineup to generate the business that Microsoft hoped to get from the acquisition of all these products. The new guy has a lot of work ahead."
—Chris Alliegro, lead analyst for business applications.

Make a Systems Management Downpayment

"Microsoft needs to show enough progress on DSI to get ISVs and corporate developers to take it seriously."
—Peter Pawlak, lead analyst, servers and systems management

Reengineer Engineering for Clearer Roadmaps

"Too often, customers have to make critical business decisions with incomplete knowledge of when Microsoft will ship the next release, and making a mistake has major financial implications with all of the risk assumed by the customer. I'd like to see some signs of release discipline breaking out in 2006."
—Michael Cherry, lead analyst, Windows

Xbox 360 Final Death Match Challenge

"Getting to profitability will require a big-name software launch while withstanding a concentrated marketing blitz from Sony. Anything less could mean years of red ink ahead."
—Matt Rosoff, lead analyst, consumer and corporate

Licensing: Value for the Money

"Maintenance and service revenue could play a major part in Microsoft’s future, but current price points and subscription model probably won’t take the company there."
—Paul DeGroot, lead analyst for sales and services

Topic: Windows

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.


Log in or register to join the discussion
  • Generalship

    If we were to ask any of the great generals of the past what they might value most, when considering a coming battle, they would be most likely to consider
    - time and
    - place
    to be most important.

    They would all, also, probably caution against fighting more than one battle at a time.

    Microsoft has already made the strategic error of signaling their attack plan well in advance - ensuring that their competitors know that 2006 is the year that Microsoft will go over the top (so to speak).

    In addition, as this list shows (and it still only tells a small part of the story), Microsoft is committed on several fronts simultaneously.

    But such strategic niceties pale by Microsoft's biggest 2006 preparation blunder. A theme jumps out at me when reading the comments in detail. All the experts pointed out, or aluded to, a lack of clarity in Microsofts future market development plans. This is the commercial equivelant of Paten sending the order "attack at dawn", and all the captains and lieutenants asking "And then what?".

    It would be foolish to bet against Microsoft across the board. Microsoft's record, and the fact that they are fighting so many battles, means that they must win something - even if only by the law of averages. In addition, Microsoft have one of the finest management records for playing the long game - making long periods of learning and investment pay off in the end. 2006 will see, for example, Vista arrive. But they know that Vista's market premiere is not the main battle - merely early skirmishing and reconn..

    Of the top ten the ones associated with the industry-wide shift from a product focus to a service focus are the most revealing. Microsoft clearly has a lot of work to do to draw a clear line from licensing to Software-as-Services. Perhaps too much?

    But, most odd, the most important battle for Microsoft in 2006 did not make the list. Microsoft XML versus ODL is their mother of all battles. Many customers, regardless of what is happening in MA, are starting to see the bright light at the end of the the Office tunnel.

    2006 could be the year that Microsoft becomes an ordinary company - with competitors in all of their markets.
    Stephen Wheeler
  • Microsoft has to show

    that it's about good products and not just about more money. It feels like it's just about the money.
    • Microsoft has shown its about the war not the battle

      MS wins the long game BECAUSE they have a process to make great products for a huge audience...even though this results in a product that doesnt always please every one. They are the world's most customer centric software producer for the market-at-large and are also winning ground in the Entrprise. The long game is about constantly elaborating your product based on customer feedback and that from a customer base whose range of sophistication is constantly broadening.

      A great example of this is the installation process of office products. While one part of thier market realizes the value of the new features of office many, if not most, havent exploited the basic functionality of Office dating back to the mid 90s. So the default installation is the bare basics (unless you choose otherwise) and advance features are added as CUSTOMER needs them.

      Will MS be here in 3O years? Who knows? But the same can be said of IBM, GE or GM. One thing is certain, any company in the market that does NOT use revenue as a principal KPI will be extinct.
      • Microsoft has to show

        that it's about good products and not just about more money. It feels like it's just about the money.
    • Microsoft has to show

      Agreed! All we ever hear from MS is revenue stream. This may be a great message for investors, but to their customers, that says "we only care about your money".

      I don't think that attitude will fly in a SAS environment.
  • Speed (and Office)

    If Microsoft thinks it wants to compete with Yahoo and Google, they'd better get rid of the MSN/AOL shell and get their content to run faster.

    As for Office, forget about any serious challenges soon. You can wow kids to play new games but you can't dazzle business users to learn a new paradigm - after all it's still just work.