"Left unattended, each (challenge) could ultimately interrupt Microsoft's 25-plus-year run of growth and profits and leave the door open for younger, smaller and more nimble competitors," the analyst house said in its end-of-year research note Wednesday.
In the order they were published, the 10 challenges are:
• Better detailed, multiyear road maps for major products such as Windows XP, Office and Exchange.
• 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 that, at the moment, are led by others, notably Apple Computer.
• Doing a better job of convincing customers that they can get more out of their software by using 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 operating system, the Firefox browser, and OpenOffice.org and its commercial variants.
• Convincing developers that its upcoming Longhorn version of Windows is the way forward.
• Making Xbox 2 the profitable, well-supported game 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 noted, "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."
Tony Hallett of Silicon.com reported from London.