What does Windows 7 mean for Microsoft?

Microsoft can ill afford another flop like Vista

On 22 October, Microsoft plans to release Windows 7, its latest operating system and the first since the 2007 launch of Windows Vista.

In many ways, the Windows 7 launch is shaping up like most other software releases from Microsoft. After extensive testing and a fair bit of marketing, the company is preparing to first ship the operating system out to system vendors, then a release to the general public.

In many other ways, however, the release of Windows 7 looks like being one of the most important in Microsoft's history. Perhaps not since Windows 95 has so much depended on the company getting a Windows update released smoothly and on time.

Though the company still has a stranglehold on the market, new threats to Microsoft's dominance are emerging every day. The walls may still be strong in Redmond, but the wolves are also beginning to surround the company.

First, there's the MacOS. Though Apple has continually hovered around with roughly a tenth of the overall market, the company has become a visible thorn in Microsoft's side.

Apple has excelled in many of the consumer areas Microsoft has failed to penetrate, particularly media players and online media services. Meanwhile, the constant public jabs from Apple's advertising series have begun to sink in with consumers, even driving Microsoft to acknowledge the much-smaller Mac market with its "I'm a PC" ad series.

If Windows 7 flounders on release, those "Get a Mac" ads will ring truer than ever with consumers.

Then on the business front there is the looming threat of Linux. Microsoft has worked to make nice with the open-source community through deals with vendors such as Novell, but the reality is that Linux remains a very real threat to the company's lucrative server branch. And with the list of enterprise Linux backers growing every day, there is less room for error than ever for Microsoft.

Microsoft lost a lot of credibility in the business world with Vista. To help regain the confidence of the enterprise world, both Windows 7 and Server 2008 need to be rolled out smoothly.

Then there's the newest threat: Google's Chrome OS. The recently-unveiled operating system will take aim at the emerging netbook market currently occupied by both Microsoft and Linux.

Though Microsoft will enjoy a significant head start over the 2010 target date for Chrome, a lame-duck netbook port of Windows 7 would only increase interest in Chrome and slow sales while buyers hold out for the Google systems.

But outside threats are not the main reason Microsoft has to make Windows 7 work. The lion's share of the trouble for Windows these days can be summed up with one word: Vista.

The disastrous release of Windows Vista was, to put it mildly, an embarrassment for the company. Hailed as the next generation of Windows operating systems, Vista landed in the market with a thud.

Dogged by ambiguous and often lofty hardware requirements, confusing pricing and bundling systems and overall disappointing performance, Vista became a certified flop in both the consumer and enterprise spaces.

In the years after Vista's release, Microsoft was subjected to the supreme humiliation of having to extend the life of Windows XP, the aging OS Vista was supposed to replace. In the business sector, many companies simply opted to skip Vista altogether and hold out for Windows 7.

Thus far, indications are that development and deployment of Windows 7 is going far smoother than that of Vista.

From the time Windows 7 was announced, Microsoft gave itself plenty of wiggle room on the release date, first estimating early 2010, then late 2009. Analysts have praised the company for its inclusion of hardware and system vendors in the development process, and many of the demanding hardware requirements of Vista are now well in the range of most PCs.

The public has also been privy to more of the development process. Microsoft has made both the beta and release candidate builds of Windows 7 available for public download, and the development team has kept in touch with users through extensive blogging.

None of that will matter come 22 October, however. All of the transparency and goodwill will be for naught if Microsoft can't deliver a sleek, functional and glitch-free release to carry the Windows banner for the next five years.

That is not to say that Microsoft is doomed if Windows 7 is a clunker. The company is still by far the largest software vendor in history, and with Windows XP closing in on 10 years of age, most will have no choice but to upgrade.

However, a poor showing by Windows 7 could signify the beginning of a decline for Microsoft. Not a death blow, but perhaps the beginning of a larger crisis in Redmond.

If more consumers lose faith in Windows, the migration to Mac and Linux will pick up. Enterprise users will likewise look to other vendors for both desktop and server software as both patience and trust in Microsoft wanes.

Windows 7 may not be a "do or die" situation for Microsoft, but it very well could prove to be a "do or decay" release.