Nothing that Microsoft might do this year would surprise me any more. Just when the entire tech industry is teeing up to drive the big launches of six big flavors of Windows Vista, two aimed at business, three aimed at consumers, and one aimed at both, Microsoft pulls the plug on delivering to the consumer channel. Microsoft claims the consumer version won’t be ready in time. Oh, and by the way, Office 2007 is also moving from an October 2006 launch to January 2007. Are they serious?

Cue the laugh track. The business version of Vista is shipping in November (and will only be available to volume-license enterprise customers), and the consumer version is scheduled to ship in January 2007. The reality is that enterprise buyers are unlikely to take the Vista plunge for a year or two. So Microsoft is shipping Vista in the way most calculated to frustrate retail-oriented OEM PC makers, small-business PC buyers, and holiday 2006 shoppers in the market for a new Windows computer. And the customers getting it first? Likely Microsoft doesn’t much care.

The reality is that while the headlines back in late March said "Consumer Windows Vista Delayed," it goes deeper than that. Many small and midsize businesses get their copies of Windows on new PCs they buy, not in direct licensing agreements with Microsoft. For all those companies, Vista is delayed, too. There will be no official Microsoft pressed discs in retail packaging of any versions of Vista before January.

I’ve written about the importance of software quality and Microsoft in this column before. A few years back, Microsoft finally got the message that its customers would prefer a product that works well to one that ships on time. This is the implied out that Microsoft is using for being late with Vista. But I’m not so sure that’s the entire reason for Vista’s delay.

In February, Microsoft released Enterprise CTP, part of the company’s new cryptic naming convention for beta releases. Originally planned to be Beta 2, it seems clear now that Beta 2 is the version that’s due out by June (and that I’m guessing will arrive in late May for distribution at Microsoft’s WinHEC trade show). Enterprise CTP was billed as being feature complete, but is that truly the case? Because this February release of Vista looks and acts like a version of Windows that’s a lot closer to finished. Microsoft had enough time to lock down the feature set, flesh it out, and run through two more major betas before freezing code in August or September. Which leads me to my first theory.

Theory One

This period after the first “feature-complete” beta release is the quintessential point in every Windows development cycle when Microsoft’s marketing folks start to sweat. As usual, the engineers have spent a lot of their effort on all but invisible plumbing for Vista. And all that stuff is pretty neat. But there’s no killer feature. The digital media stuff is OK, not amazing. The security stuff is good, not stellar. The new Windows Sidebar is visible, but . . . um, yawn. There’s a long list of improvements in Vista for business and home users, but there are no gotta-have-it features. So even though this maneuver is reminiscent of the 1990s version of Microsoft, one wonders whether the software giant might be planning to add something new, more compelling, and more marketable to the Vista feature set. Because if so, Microsoft would definitely need more time to test it.

Theory Two

Microsoft has just gone through a major reorganization. Senior Vice President Steven Sinofsky, who has been the head of the Office team, will be taking over the day-to-day operations of the Windows and Windows Live engineering group after Vista’s launch. Jim Allchin, co-president of the platform products and services division, announced earlier this year that he will retire after Vista ships. Allchin has been a central figure in Windows development at Microsoft since 1990. There can be no doubt that his goals have always been to create the best versions of Windows possible; Windows 2000, Windows XP, and Windows Server 2003 have his stamp on them. All three of these OSes are known for quality and reliability.

The Office 2007 development iterations have been more closed to reviewers than Vista’s. But our last look at Office 2007 showed a product that was being developed based on the form of the latest Microsoft thinking about user interfaces than Vista was headed in. What’s more, the Office team was forced to go back and focus on development for WinXP mostly because the Vista development process is far more complex and subject to change due to internal and external influences. It may be telling that the Office 2007 team announced almost immediately that Office 2007 would be pushed back to match the delayed Vista ship date. It’s possible that making these two products work together and share a concerted marketing plan is the true impetus behind the delay of both products.

Theory Three

Keep it simple, Scot. Maybe there really are quality concern issues. But perhaps the concerns come from OEM PC makers. Allchin has vaguely ascribed the cause of the Vista delay to issues raised by PC makers. It’s possible to read that this way: Vista’s new Avalon presentation system (which requires specific graphics processor and video memory support) and its automatic two-tiered graphics display process (if your PC doesn’t meet the hardware requirements for Vista Aero, the user interface falls back on the less glitzy Vista Basic video mode), and many other underlying changes to the OS may have prompted OEM PC makers to feel they need more time than usual to work with the final code before shipping with new hardware to match it. In other words, Microsoft was cutting the schedule very close leading up to the holiday season (something it has frequently done in past), and this time, the big PC makers pushed back.

Microsoft may have belatedly realized that Sony, HP, Dell, Gateway, Lenovo, Acer, Toshiba, and others were going to have trouble stocking the retail channel in time for the holidays,. Rather than take that black eye late in the process, Microsoft cut its losses now.

Build A Better Mousetrap

All of this leads me to a point worth making. Despite Bill Gates' recent references in speeches about rising Windows Media Center sales, consumer buyers of Windows are not where Microsoft’s bread is buttered. The software giant makes several times more money from its enterprise customers than it does through retail channels. Of the retail market, the majority of Microsoft’s revenue comes from sales of new PCs. People who buy Windows in this fashion don’t even get technical support from Microsoft, which forces PC makers to provide support for their product. The software company’s licensing agreement doesn’t allow people who acquire Windows as part of a new PC purchase to remove the OS from that machine and install it on another. Over the years Microsoft has pulled away from noncorporate PC users. Despite developing three or four versions of Vista (depending on how you count them) aimed at consumers, it gives consumers and small businesses very short shrift.

It’s at least conceivable that the Mac OS X and Linux OSes could drive a significant wedge into this Microsoft-controlled business segment. Apple has the product best suited to the task, but its management would have to begin thinking differently. Proprietary hardware doesn’t work. Even with its recent shift to Intel-based hardware on some models, Apple is actively attempting to micromange its user base. Go after the Windows consumer and small-business market, Apple. The market is more than ready for that change.

by Scot Finnie