Microsoft struggling to put out next Windows

~ The release was thrown off track in 2002, when Bill Gates ordered the company to focus on improving security.

SEATTLE -- 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.

Words such as "blog" and "spyware" have entered the popular lexicon, in their own ways transforming the online experience. The iPod and the BlackBerry have revolutionized on-the-go gadgetry, becoming just two of the myriad competitors challenging the world's largest software company.

Meanwhile, Microsoft has undergone major changes of its own, including a massive retrenchment to focus on security and moves to get further into businesses as varied as videogame consoles and online mapping.

Yet the company has struggled to push out the next release of its flagship product.

"The product is clearly now really late," said Rob Enderle, who is among the industry analysts who once expected the new Windows version as early as 2003.

Microsoft announced this 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.

"We made the decision that it was more important for our customers to improve the security of our existing products than it was to accelerate the introduction of (Windows Vista)," said Brad Goldberg, general manager of Microsoft's Windows Client product management.

Goldberg 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 may appear to be a long stretch between Windows XP and Vista.

"We actually feel like we've released a lot in the last five years," he said.

Efforts to further improve security in Vista continues 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 that 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 on.

But untangling Windows takes time.

Along the way, Microsoft has scaled back expectations for Vista, most notably by deciding not to ship Vista with WinFS, a highly sophisticated system for storing and organizing data. That will be added later, and analysts point to it as an example of how Vista may not offer enough whiz-bang features to compel people to immediately upgrade.

"This issue may be that people look at this version and say, 'Windows XP is enough."' Enderle said. "That's probably a bigger problem for Microsoft."

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. could eventually call into question the need for a pricey Windows operating system at all.

Microsoft is working to address that problem with moves such as this week's corporate reshuffling designed in part bolster online offerings to complement Windows.

Meanwhile, 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 like the iPod and the BlackBerry.

And as the evolution of online journals called blogs and malicious software known as spyware have shown, both online offerings and security threats can develop with alarming speed, sometimes making it difficult for a company as large as Microsoft to respond.

Gillen said Microsoft's ability to compete in the future may be less about delivering a new operating system on time than about being able to quickly create products that can compete in this new environment.

"It's not necessarily about making Vista more competitive," he said. "It's about making Microsoft more nimble."