In its customary end-of-year research note issued late on Wednesday, the analyst house wrote: "Left unattended, each [challenge] could ultimately interrupt Microsoft's 25+ year run of growth and profits and leave the door open for younger, smaller and more nimble competitors."
In the order they were published, the 10 challenges are:
• Better detailed, multi-year roadmaps for major products such as Windows XP, Office and Exchange.
• Acquisitions that are revenue generating. The analyst house criticises the Great Plains, Navision and GeCAD buys as not delivering enough fast enough.
• Better security - "despite laudable efforts by Microsoft, such as drop-everything-else code review, security is still a problem… In fact, the bad guys seem to be winning."
• Making the PC a home entertainment hub, not trailing integrated digital lifestyle approaches at the moment led by others, notably Apple.
• Doing a better job of convincing customers they can get more out of their software by deploying newer versions.
• Fending off open source software. This is about server software but now increasingly also about the desktop, in the form of the Linux OS, the Firefox browser and OpenOffice.org and its commercial variants.
• Convincing developers upcoming OS Longhorn is the way forward.
• Making Xbox 2 the profitable, well-supported games console the first Xbox has struggled to become.
• Shipping a 64-bit version of Windows that encourages PC upgrades.
• "Playing well with others." On the day that the software company received no slack from a European court, Directions on Microsoft's last point notes: "Microsoft needs cautious, clearly written and tightly enforced rules of engagement for employees working with customers, partners and competitors, particularly cases involving any exchange of intellectual property or trade secrets. Otherwise, it will be planting the seeds of tomorrow's multibillion-dollar settlements."