Vista holds clues to Microsoft's future

Microsoft has designed Vista to be a modular OS with fewer interdependencies, which would ultimately make it more stable

It's just a sleep before the consumer launch of Windows Vista, and by now most everyone has heard about Vista's new and improved Aero user interface, desktop search, security and various multimedia enhancements.

But there's far more to Vista than the features consumers will experience when they use the OS. Five years in the making, Vista -- an evolutionary move rather than a revolutionary one -- has broad implications for Microsoft. Inside Vista are clues about the future of Windows, and how Microsoft plans to position its number-one core product going forward.

Windows Vista represents a pivotal change for Microsoft for several reasons. For one, the company has been very public about how it changed its own internal development style to create Vista's new architecture.

Because previous versions of Windows had so many interdependencies between different parts and layers of the OS, Microsoft tried to create Vista as a modular OS with fewer interdependencies, which would ultimately make it more stable, said Al Gillen, an analyst with research firm IDC.

"With the way the OS has become modularized, it gives Microsoft the ability to bring features and functionality out in a much less disruptive fashion," he said.

In the future, this also positions Windows better to take advantage of virtualization technologies, which are becoming integral to the OS environment on both the server and the desktop, Gillen said. Virtualization allows multiple OSes and applications to run simultaneously in environments where previously only one OS or application could run.

"Virtualization is going to have a big impact on all OSes, and the more we use it and integrate it with our hardware and OSes, the OS has less to do because virtualization covers some of the features," he said. An OS has to be modular to take full advantage of future virtualization enhancements, Gillen said.

Secondly, Vista comes at a time when Microsoft -- and the industry -- is making the transition from 32-bit to 64-bit computing. The first version of Windows to come out in 64-bit was Windows XP, and Vista will follow suit, but both XP and Vista are primarily 32-bit OSes. It's widely believed, and Microsoft has hinted, that Vista will be the last version of Windows client to come in a 32-bit version.

Michael Silver, analyst for Gartner, said most PCs sold now are capable of running 64-bit applications, but that capability has not been widely used because the device drivers are not available for those applications.

However, by the time the next version of Windows client OS is available in 2009 or 2010, "the device vendors should be caught up in terms of 64-bit drivers," he said.

Still, Microsoft's huge partner ecosystem for Windows limits its ability to make drastic changes to its OS, and this may hamper its move to a 64-bit only version of the Windows client OS, Gillen said.

"If Microsoft brings out a release that disrupts 10 percent of their customers, that creates a lot of negative press for them," he said.

That comment rang true when Microsoft unveiled that the next version of Exchange would run only on 64-bit systems. Partners and customers protested because many of them already run Exchange on 32-bit servers, and the transition to Exchange 2007 will require them to either purchase new servers or retool their IT architectures to run the application on 64-bit servers.

Making big transitions to new technology is not the case for Microsoft rival Apple, which can be nimble in the innovations it wants to make in its OS and related hardware. "The Apple community grumbles for a while, and then they move on," Gillen said.

This factor also could affect the notion that Vista will be the last packaged version of Windows, and that Microsoft will deliver future versions as updates over the Web. Windows Vista is the first OS to be available that way, at least in upgrade form. Microsoft is giving consumers the ability to upgrade to higher-end versions of Vista over the Internet with an activation key.

But no matter how the next version of Windows Vista is delivered, it's clear that the OS is entering an era where it may not be the number-one priority for Microsoft that it once was.

"Microsoft is hoping that they diversify their revenue a bit more," said J.P. Gownder, principal analyst with Forrester Research. "This is obvious with consumer stuff like Zune and the Xbox, but also you see it with IPTV, where they've created a whole platform to sell to service providers. They recognize the OS will remain an important part of the business, but they will have to move into other areas."

It remains to be seen how successful Microsoft will be with Vista and its moves to derive revenue from other sources. But it's possible that years from now the industry will look back at Vista's launch on Tuesday as a major shift, both in perception and strategy, for the software vendor.

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