Will Longhorn delays trigger Windows version creep?

WITH LONGHORN apparently now delayed indefinitely - after slipping its 2004 and 2005 launch dates - Microsoft has to be wondering what major products it'll release to fill the OS gap, as well as how to handle its Software Assurance customers who, having poneyed up for software upgrades over a three year span of time, are now discovering that they may receive no upgrades from the agreement at all. Microsoft's licence terms don't guarantee customers that upgrades will exist, it simply allows them to purchase them at "bargain" prices when they eventually become available.

Microsoft basically has three choices — release an interim version of Windows (and risk a Windows ME like debacle), simply take a long dry spell in the OS market until Longhorn is finally ready to go, or attempt to branch Windows into other markets and divisions, such as Tablet PC and Media Center PC. Before long we'll also have Windows 64-bit edition (AMD64), which gives the company another niche market to sell into. It could even do combinations — 64-bit Media Center, and so on.

Releasing an interim "new" version of Windows might offer the best short-term profit, but probably has the weakest long-term gain. After the fiasco of Windows ME (which was always known to be nothing but an interim product) customers may be less likely to upgrade to Microsoft's latest-and-greatest knowing that there's a completely different product around the corner. Like ME, any interim release would probably retain the GUI look / feel of Longhorn, but lack the substantive underpinnings that made the OS what it is (just as ME looked like, but didn't act like, Windows 2000).

Taking a hiatus from the OS market would probably hurt less then initially apparent. Not only would Microsoft continue to make great money bundling Windows with OEM sales, but a longer upgrade cycle will undoubtedly make businesses and consumers more willing to upgrade when Longhorn eventually does appear. It also gives Microsoft a chance to jack up its system requirements even more. A cutting-edge Windows 2000 (when new) could run WindowsXP with no trouble at all, but a cutting-edge 2001 computer will most likely choke and die on a 2005-2006 operating system. Try running Windows 2000 on a cutting edge Pentium from the 1995 era—the results ain't gonna be pretty. This means more cash in MS's pockets, more people upgrading to their DRM management and new file system, and a larger market share with which to bludgeon software manufacturers into supporting the new features. If Microsoft wants the maximum number of upgrades possible for Longhorn as quick as possible, this is probably the way to go.

Finally, we could see the Vole continuing to push into specialized consumer niches, including the cell phone market. With its suggestion that ultra-high DVD video be released in a Windows Media Player 9-only format and its determination to fight Linux on all fronts, Microsoft could be gearing up to prevent the Penguin of Doom from stealing market share in soon-to-be-developed markets. It'll be interesting to see if any Linux distributions announce intent to prep a desktop or media system for an Athlon 64 box, and, if they do, what Microsoft's response to that is. The next five years have quite a few options open to Microsoft—and sitting still isn't one of them. µ