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Is Vista's delay good for the industry?

Microsoft's Brad Goldberg says the company made the right call. But will PC sales suffer?

When it comes to Vista, Microsoft's update to the client version of Windows, sticking to a product shipment schedule has been a recurring problem.

Most industry watchers thought the company would revise its ship date in time for this year's holiday season, especially after the well-publicized "reset" of Vista--back when it was still known as Longhorn--in August of 2004. But Tuesday, Microsoft again pushed back its launch plans.

Company executives say the move is a necessary short-term pain that will lead to a long-term gain for the entire PC industry. Analysts aren't so sure and wonder if holiday-season PC sales--as well as Microsoft's credibility with partners--will suffer as a result.

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Ina Fried interviews Brad Goldberg about the Vista delay.

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To get an insider's view on the thinking behind the decision to delay Vista, CNET spoke with Brad Goldberg, general manager for Windows Client product management at Microsoft.

Q: When Microsoft announced changes in 2004 to the Longhorn--now Vista--schedule, one goal was to take out WinFS and change some features to really guarantee a holiday 2006 launch. Does Microsoft now regret that decision?
Goldberg: In August of 2004 we made three announcements: We were going to be taking parts of the Windows development platform down-level to Windows XP; we were going to be separating the release from WinFS; and we were going to have broad availability of Windows Vista in the second half of 2006. Those were absolutely the right decisions based on customer feedback, and I feel very good about all of the decisions we made then. That really has shaped a lot of the work we have done on the project since then.

It seems like the Vista delay will create a lot of headaches for PC makers and how they plan to sell PCs during the holidays. Is Microsoft going to do anything to help them out?
Goldberg: The feedback that we have heard from partners is different than what you just outlined. The feedback we got from OEM (original equipment manufacturer) partners, retailers, channel partners and others was pretty consistent. They were asking us for visibility around our ability to deliver broadly for consumers at the holiday season. They said the thing that would have been hardest and most challenging would have been getting to a point close to the holiday and either scaling back availability to the point where people wouldn't have the supply to meet demand, or that we would have to alter some plans after they had made investments. So, this decision was really made based on very consistent feedback we got from the industry about how to think about our release timing.

We've also heard that January has emerged as a very significant month from a consumer perspective, almost as a second holiday selling season...

Windows chief Jim Allchin talked on the conference call about how security was a particular issue (for the delay). But in general, it seems that security stuff is related to architectural decisions that were made a long time ago. Was there something specific that came up recently on the security front?
Goldberg: The points that Jim was trying to make were around the fact that we were feature-complete earlier in the year and now it's around fit and finish, and what we need to do to get the overall user experience that we want. One example is user account control. That's an area where there is very significant investment that we made. It's one of the areas of the product that's going to drive the most value around a safer, more secure computing experience for businesses as well as for consumers. But like Windows XP Service Pack 2, when we make changes to make the computing experience more secure, there can be an impact on applications. This is a space that as we work with corporate customers, they need to look at the impact that changes they need to make will have on applications. When we work with consumers, ISVs and other software vendors, we want to be conservative and make sure we have the right amount of time so that we can act on the feedback we get from customers through the rest of the cycle.

There's been talk of a really big marketing campaign to coincide with the launch of Vista and Office 2007 this holiday season. How has the change in Vista's mainstream consumer-launch plans affected those marketing plans?
Goldberg: One of the places we've received consistent feedback from corporate customers is that when they look at both Office 2007 and Vista, they would ideally like to deploy both the new operating system and the new Office suite together because of the benefits of only having to touch the desktop once. Specifically for corporate customers, we're going to stay pretty tightly integrated with the Office team to ensure that customers have the tools and the right guidance and overall readiness for the rollout of Vista and Office 2007 for their infrastructure.

Analysts disagree with the notion that this won't affect PC sales this holiday season, since they already had plans in place. What makes Microsoft believe that the January launch of Vista won't affect PC sales in the fourth quarter of this year?
Goldberg: First, the conversations we've had with the industry walking through the pros and cons given where we were. Being on the bubble of making it or not making it, people really wanted us to be predictable and make the more responsible choice for the industry. We've also heard that January has emerged as a very significant month from a consumer perspective, almost as a second holiday selling season given the emergence of things like gift cards--both from an OEM new PC and a retail perspective. Plus, looking at markets outside the U.S., we think there's a real opportunity in that timeframe for a great launch post the new year. So we feel good about plans there.

What does this mean in terms of Microsoft's reputation as a developer? Certainly Microsoft gets knocked for not getting products out on time more than other companies. How does Microsoft deal with that perception in the industry and with partners that count on those releases?
Goldberg: In this case, we really prioritized the feedback we got from the industry around the given the timeframe we're at, trying to give as much notice and lead time to get on a high confidence plan to deliver a quality product where customers can trust our quality. Again, we're making a responsible choice for the overall industry. We're hoping these announcements support our commitment to being a predictable partner and support those core principles that are important to us.

One of the things that Microsoft has talked about--in the future post-Vista---is trying to have quicker releases of Windows. I?m wondering if the testing cycle and the tail of the development cycle is giving Microsoft any pause over how realistic it is to crank out OS releases on a more frequent schedule?
Goldberg: Jim (Allchin) touched on this a little bit. We feel like the changes we made around engineering excellence and the new Community Technology Preview process are giving us a very good read on what we need to be doing through all phases of the development cycle. There are some unique things related to the holiday selling season specifically, where after we went through (Windows XP) Service Pack 2, which we released right at the very end of August. There was some feedback from partners around the timing of that. So there are learnings for us, but it's more about the timing, not the frequency, of releases and making sure we are fully aligning in the right ways with all aspects of the industry so we make sure we give the right amount of lead time.

The next time around, earlier in the year might be a better time for OS releases?
Goldberg: As far as frequency, we are looking at what is the right timing that works for the breadth of both OEM and retail partners and how we really make sure we are planning well with the industry so we have a window to shoot for that gives everyone plenty of time to plan.

So the frequency goals are still similar. The lessons, if any, are really around what time of year you do launches.
Goldberg: The aspirations around frequency are the same. The windows for release--when you look at the logistics of the distribution channel and how we think about the timing from when we finish bits here and then we ensure that partners have the lead time to make all of the steps they need to preload Windows on new PCs--that is the window that we need to think about. Now how we think about launches is different than how we think about release windows and lining up distribution.