Windows is "collapsing" and Microsoft Corp. must make radical changes to the way it does business if it wants to remain viable, according to a pair of Gartner analysts.
Michael Silver and Neil MacDonald, analysts at the technology research firm, said on Thursday that Microsoft has not responded to the market and faces serious competition in a number of areas that will make the Windows operating system obsolete unless the company takes significant action.
The Redmond, Wash.-based software behemoth is being dragged down by nearly two decades of legacy code, which has made it impossible for it to quickly design a new version of Windows that has any meaningful improvements. That is primarily why computer users have been so slow to voluntarily adopt Windows Vista, Silver and MacDonald said.
"This is a large part of the reason Windows Vista delivered primarily incremental improvements," they said at a Gartner-sponsored conference in Las Vegas. "Most users do not understand the benefits of Windows Vista or do not see Vista as being better enough than Windows XP to make incurring the cost and pain of migration worthwhile."
Only about six per cent of businesses have adopted Vista, the analysts said in a presentation titled "Windows is Collapsing," with many opting to wait until the next version is released.
Silver and MacDonald also said Windows on the whole is becoming less important, since software developers are now designing applications more for the web than for operating systems. Microsoft is falling behind and could face major turmoil in as little as three years, when it will have trouble competing with web and mobile applications.
"Apple introduced its iPhone running OS X, but Microsoft requires a different product on handhelds because Windows Vista is too large, which makes application development, support and the user experience all more difficult," they said. "Windows as we know it must be replaced."
Industry experts said Microsoft is aware that Windows' days may be numbered, which is why the company is pursuing a takeover of internet portal Yahoo Inc. so fiercely. Converting itself to a web company is crucial for Microsoft.
"Online advertising revenue is their only real hope of long-term survival," TechCrunch editor Michael Arrington wrote on his blog recently.
Microsoft has once again extended the shelf life of Windows XP Home, allowing computer makers to install the older operating system on ultra-cheap laptops through to the middle of 2010. The system was to have been decommissioned at the end of June.