Top 10 hurdles for Microsoft in '06

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, salesforce.com 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