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March 28, 2006

BY ALLISON LINN

In the half-decade it has taken Microsoft Corp. to develop a new version of its Windows computer operating system, Google Inc. has blossomed from a little-watched Internet search engine to emerge as one of Microsoft's biggest threats.

Despite the competition, the company has struggled to push out the next release of its flagship product.

Microsoft announced last week that the consumer version of Vista will be delayed again, until early next year, further extending the yearslong gap between major Windows releases. (A version for large business customers is due out in November.)

The delay, which the company said resulted in part from efforts to improve security, is the latest in a series of hiccups for Windows Vista.

The release of Vista was thrown off track in early 2002, when Chairman Bill Gates ordered the entire company to focus on improving the security of its existing and future products, following a series of embarrassing breaches.

The time-consuming effort, which included a major security update, Service Pack 2, for the current Windows XP, has helped keep Microsoft customers safe from Internet attackers. But the work also took engineers away from developing Vista.

Brad Goldberg, general manager of Microsoft's Windows Client product management, counts the Service Pack 2 release -- as well as versions of Windows for Tablet PCs and computers that are meant to be media hubs -- as evidence that the company has been quite busy despite what might appear to be a long stretch between Windows XP and Vista.

Efforts to further improve security in Vista continue to be a factor in more recent delays, which analysts say are likely because the company wants to make further, aggressive improvements.

For example, the new version of Windows will include more sophisticated ways to prevent people from downloading dangerous software.

Al Gillen, a research director with IDC, said the improvement is important but also quite difficult because Microsoft must make sure users can still easily use legitimate programs.

It's one of many ways that Windows' vast popularity can be both a blessing and a curse. When a new version is released, the company must ensure its compatibility with existing printers, photo-editing software and hundreds of thousands of other non-Microsoft products.

"They really do have a lot of baggage they drag on," Gillen said.

Security and compatibility aren't all to blame. Microsoft also is trying to make long-overdue improvements to the architecture of the operating system. Over many releases, analysts say, the system became unwieldy, making simple jobs complex because various pieces of the system were so interconnected.

"Windows itself has just grown into an enormous hairball over time," said Roger Kay with Endpoint Technologies Associates.

Goldberg said the efforts to reduce such technical dependencies inside Windows will help Microsoft more easily add more sophisticated functions later .

Looking ahead, Microsoft might have even thornier problems. The industry has changed dramatically since Windows XP came out in October 2001, and analysts say that online offerings from companies such as Google and Yahoo Inc. eventually could call into question the need for a pricey Windows operating system at all.

Consumers also are getting more interested in doing everything from sending e-mail to watching television on mobile devices, and Microsoft is struggling to find a foothold against must-have gadgets such as the iPod and the BlackBerry.

AP