WITH LONGHORN apparently now delayed indefinitely - after slipping its 2004 and 2005 launch dates - Microsoft has to be wondering what major products it'll release to fill the OS gap, as well as how to handle its Software Assurance customers who, having poneyed up for software upgrades over a three year span of time, are now discovering that they may receive no upgrades from the agreement at all. Microsoft's licence terms don't guarantee customers that upgrades will exist, it simply allows them to purchase them at "bargain" prices when they eventually become available.
Microsoft basically has three choices — release an interim version of Windows (and risk a Windows ME like debacle), simply take a long dry spell in the OS market until Longhorn is finally ready to go, or attempt to branch Windows into other markets and divisions, such as Tablet PC and Media Center PC. Before long we'll also have Windows 64-bit edition (AMD64), which gives the company another niche market to sell into. It could even do combinations — 64-bit Media Center, and so on.
Releasing an interim "new" version of Windows might offer the best short-term profit, but probably has the weakest long-term gain. After the fiasco of Windows ME (which was always known to be nothing but an interim product) customers may be less likely to upgrade to Microsoft's latest-and-greatest knowing that there's a completely different product around the corner. Like ME, any interim release would probably retain the GUI look / feel of Longhorn, but lack the substantive underpinnings that made the OS what it is (just as ME looked like, but didn't act like, Windows 2000).
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News source: The Inq