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A research firm has identified its top ten concerns facing Microsoft in 2006, putting the challenge of making Windows Vista appeal to corporate customers at the top of the list.

Upgrade a Hard Sell

Directions on Microsoft, a Kirkland, Washington, research group that exclusively follows the neighboring software company's moves, believes Microsoft will face an uphill battle convincing corporate customers to upgrade to the next version of Windows.

"The Windows Client division has to tell corporate customers why they want Windows Vista, and why they shouldn't wait until they buy new hardware," according to a statement by its Director of Research Rob Helm.

Other challenges mentioned on Directions on Microsoft's list include tweaking of the Redmond, Washington, company's software engineering process in order to deliver clearer product road maps, and making its investment in Xbox 360 pay off.

Another area that will prove challenging in the new year for Microsoft is one that has been a constant source of trouble for the vendor--application security and reliability. The company has always offered its customers and partners guidelines for building secure and reliable software, but it has not taken its own advice, according to Directions on Microsoft. This has to change, particularly in the run-up to the Windows Vista launch, which is expected to come toward the end of 2006.

Challenges for 2006

The six other challenges Microsoft faces in the new year, according to the research group and in no particular order, are:

• Delivering clarity about where its managed services business is headed;
• Pressing its developer tools division to deliver new tools that were promised as part of November's Visual Studio 2005 release but have not been made available;
• A refreshed Web strategy to compete with Google, including a more predictable, believable plan, not one that changes every time Google makes a new move;
• Turning its systems-management products from vaporware to a real asset that has the potential to give Microsoft a major competitive edge;
• Continued restructuring of its licensing to provide more value to customers by solving some core problems, such as closing the gap between the pricing of its Software Assurance maintenance plan and the actual release of products that make the plan worthwhile.

If Microsoft fails to address these problems in 2006, the company could face a hiccup in its more than 25 years of growth and profitability, and leave the door ajar for more nimble competitors to enter, according to Directions on Microsoft.